Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Fife Trust Estate Bill [Lords],

Ordered, That, in the case of the Fife Trust Estate Bill [Lords], Standing Order 243 be suspended, and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Bill accordingly read the Third time, and passed, without Amendment

Glasgow and Rutherglen Corporations Order Confirmation Bill,

Considered; read the Third time, and passed.

SCOTTISH WIDOWS' FUND AND LIFE ASSURANCE SOCIETY ORDER CONFIRMATION BILL,

"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to Scottish Widows' Fund and Life Assurance Society," presented by Mr. MUNRO; and ordered (under Section 7 of the Act) to be considered To-morrow.

PIER AND HARBOUR PROVISIONAL ORDER (No. 2) BILL,

"to confirm a Provisional Order made by the Minister of Transport under the General Pier and Harbour Act, 1861, relating to Poole Harbour," presented by Mr. NEAL.

Ordered, That Standing Order 193a be suspended, and that the Bill be now read the First time.—[The. Chairman of Ways and Means.]

Bill accordingly read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 227.]

STANDING ORDERS.

STANDING ORDER 11—(Application to owners, etc., on or before 15th December.)

On or before the fifteenth day of December immediately preceding the application for a Bill for power to take any lands, or houses
compulsorily or for compulsory user of the same, or for an extension of the time granted by any former act for that purpose, or to impose an improvement charge on any lands or houses, or to render any lands or houses liable to the imposition of an improvement charge, application in writing shall be made to the owners or reputed owners, lessees or reputed lessees, and occupiers of all such lands and houses, inquiring whether they assent, dissent, or are neuter in respect of such application; and in cases of Bills included in the second class, such application shall be, as nearly as may be, in the form set forth in the Appendix marked (A).

Amendment proposed: Leave out the words "application in writing shall he made," and insert instead thereof the words
notice in writing of the application shall he given."—[The Chairman of Ways and Means.]

Sir W. JOYNSON-HICKS: With regard to four of the Amendments on the Paper to Standing Orders, the Chairman of Ways and Means has very kindly consented to allow them to stand ever till the Autumn. I do not object to the others.

Ordered, "That the Debate be now a adjourned."—[The Chairman of Way and Means.]

Debate to be resumed upon Tuesday, 21st November.

STANDING ORDER 14.—(Notice when it is proposed to abstract Water from any Stream.)

On or before the 15th day of December immediately preceding the application for a Bill, whereby it is proposed to abstract water from any stream for the purpose of supplying and cut, canal, reservoir, aqueduct, navigation, or waterwork, notice in writing of such Bill shall be given to the owners or reputed owners, lessees or reputed lessees, and occupiers of all mills and manufactories or other works using the waters of such stream for a distance of 20 miles below the point at which such water is intended to be abstracted, such distance to be measured a long the course of such stream, unless Hue]) waters shall, within a less distance than 20 miles, fall into or unite with any navigable stream, and then only to the owners or reputed owners, lessees or reputed lessees, and occupiers of such mills and manufactories, or other works as afore-aid, shall be situate between the point at which such water is proposed to he abstracted, and the point at which such water shall fall into or unite with such navigable stream; and such notice shall state the name (if any) by which the stream is known at the point at which such water shall be immediately abstracted, and also the parish in which such point is situate, and the time and place of deposit of plans,
sections, and books of reference and copies of the "Gazette" notice respectively with the clerks of the peace.

Amendment made: Leave out the words "and Copies of the 'Gazette' Notice, respectively."—[The Chairman of Ways and Means.]

STANDING ORDER 31.—("Gazette" Notice to be deposited with Plans, etc.)

Wherever any plans, sections, and books of reference, or parts thereof, are required to be deposited, a copy of the notice published in the "Gazette" of the intended application to Parliament shall be deposited therewith.

Ordered, "That the Standing Order be repealed."—[The. Chairman of Ways and Means.]

STANDING ORDER 35.—(Deposit of Estimates, etc., in Private Bill Office.)

All estimates and declarations, and lists of owners, lessees and occupiers, which are required by the Standing Orders of this House, shall he deposited in the Private Bill Office on or before the 31st day of December.

Amendment made: Leave out the words "and lists of owners, lessees and occupiers."—[The Chairman of W and beans.]

STANDING ORDER 36.—(Copies of Estimate and Declaration to he printed, and delivered at Private Bill Office.)

On or before 31st December, copies of the estimate of expense of the undertaking; and where a declaration alone, or declaration and estimate of the probable amount of rates and duties, are required, copies of such declaration, or of such declaration and estimate, shall be printed at the expense of the promoters of the Bill, and delivered at the Vote Office for the use of the Members of the House, and at the Private Bill Office for the use of any Agent who may apply for the same.

Amendment made: Leave out the words
and where a declaration alone, or declaration and estimate of the probable amount of rates and duties, are required, copies of such declaration, or of such declaration and estimate."—[The Chairman of Ways and Means.]

STANDING ORDER 58.—(Cases in, which Declarations may be deposited in lieu of Money.)

Where the work is to be made, wholly or in part, by means of funds, or out of money to he raised upon the credit of present surplus revenue, belonging to any society or company, or under the control of Directors, Trustees, or Commissioners, as
the case may be, of any existing public work, such parties being the promoters of the Bill, a declaration stating those facts, and setting forth the nature of such control, and the nature and amount of such funds or surplus revenue, and showing the actual surplus of such finds or revenue, after deducting the funds required for purposes authorised by any Act or Acts of Parliament, and also the funds which may be required for any other work to be executed under any Bill in the same Session, and given under the common seal of the society or company, or under the hand of some authorised office of such directors, trustees, or commissioners, may be deposited, and in such case no deposit of money shall be required in respect of so much of the estimate of expense as shall be provided for by such surplus funds.

Ordered, "That the Standing Order be repealecl"—[The Chairman of Ways ad Means.]

STANDING ORDER 59.—(cases, which Declaration and Estimate of Amount of Rates nary be deposited.)

In cases of any Bill under which no private or personal pecuniary profit or advantage is to be derived, and where the work is to be made out of money to he raised upon the security of the rates, duties, or revenue already belonging to or under the control of the promoters, or to be created by or to arise under the Bill, a declaration stating those facts, and setting forth the means by which funds are to be obtained for executing the work, and signed by the party or agent soliciting the Bill, together with an estimate of the probable amount of such rates, duties or revenue, signed by the person making the same, may be deposited, and in such case no money deposit shall he required.

Amendment made: Leave out the words
a declaration stating those facts, and setting forth the means by which funds are to be obtained for executing the work, and signed by the party or agent soliciting the Bill, together with an estimate of the prohable amount of such rates, duties or revenue, signed by the person making the same, may he deposited, and in such case."—[The Chairman, of Ways and Means.]

APPENDIX (A).

(FORM referred to in Pages 97 and 135.)

No.

Sir,
WE beg to inform yoga that Application is intended to be made to Parliament in the ensuing Session for "an Act [here insert the Title of the Act], and that the property mentioned in the annexed Schedule. Part I, or some part thereof, in which we understand you are interested as therein stated, will be liable to be taken compulsorily for the purposes of the said undertaking rand that the property mentioned in the annexed Schedule, Part. II.
in which we understand you are interested as therein stated, will be unable to have an improvement charge imposed upon it].
We also beg to inform you, that a plan and section of the said undertaking, with a book of reference thereto have been or will be deposited with the [several Clerks of the Peace or prinicipal Sheriff Clerks, as the case may be] of the Counties of [specify the Counties in which the property is situate], on or before the 30th November, and that copies of so much of the said plan and section as relates to the [parish or other area in accordance with the terms of Standing Order 29, as the case may be] in which your property is situate, with a book of reference thereto, have been or will be deposited for public inspection with the [Clerk, or oilier Officer in the said Order respectively mentioned, as the case may be], on or before the 30th day of November, on which plan your property is designated by the numbers in the annexed Schedule.
As we are required to report to Parliament whether you assent to or dissent from the proposed undertaking, or whether you are neuter in respect thereto, you will oblige us by writing your answer of assent, dissent, or neutrality in the form left herewith, and returning the same to us with your signature on or before the day of next; and if there should be any error or misdescription in the annexed Schedule, we shall feel obliged by your informing us thereof, at your earliest convenience, that we may correct the same without delay.
We also beg to inform you that it is intended that the Act shall provide to the effect that, notwithstanding Section 92 of the Lands Clauses Conslidation Act, 1845 [or Section 90 of the Lands Clauses Consolidation (Scotland) Act, 1845], you may be required to sell and convey a part only of your property, numbered on the deposited plans.
We are, Sir.
Your most obedient servants,
To
NOTE.—If the application is forwarded by post, the words "Parliamentary Notice" are to he printed or written on the cover.
Schedule

Amendment made: Leave out the words
As we are required to report to Parliament whether you assent to or dissent from the proposed undertaking, or whether you are neuter in respect thereto, you will oblige us by writing your answer of assent, dissent, or neutrality in the form, left herewith, and returning the same to us with your signature on or before the day of next; and."—[The Chairman of Ways and Means.]

COLONIAL STOCK ACT, 1900.

Copy Ordered,
of Treasury list of Colonial stocks in respect of which the provisions of the Act are for the time being complied with."—[Mr. Hilton Young.]

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

CHILDREN (EDUCATION GRANTS).

Mr. GWYNNE: 4.
asked the Minister of Pensions whether the grants made by the Special Grants Committee for the education of children of men who were killed in the War are to be terminated on the grounds that such grants are now considered to be outside the scope of the Ministry?

The MINISTER of PENSIONS (Mr. Macpherson): No, Sir. The powers of the Special Grants Committee to make grants in aid of the education of such children remain intact, subject to their approved rules of working.

POST-MORTEM EXAMINATION.

Major M. WOOD: 5.
asked the Minister of Pensions whether he had any additional evidence of death being due to alcoholic excess in W case, No. 10646, Royal Engineers, beyond the fact, disclosed by the post-mortem examination, that the organs smelt of alcohol; and, if so, whether he will state the nature and source of such evidence?

Mr. MACPHERSON: I regret that I have, nothing to add to the answer I gave my hon. and gallant Friend regarding this case on the 6th July, except to refer him for additional facts to the letter sent to him by the Scottish Regional Director on 17th November, 1920.

Major WOOD: Is the right hon. Gentleman aware that there are additional facts given there?

Mr. MACPHERSON: I read the letter this morning, and if my hon. and gallant Friend will care to come to see me, I will show him one very important addition.

Major WOOD: May I have a copy of it?

Mr. MACPHERSON: Yes, certainly.

Oral Answers to Questions — IRELAND.

ROYAL IRISH CONSTABUULARY.

Sir J. BUTCHER: 6.
asked the Chief Secretary for Ireland what provision is
now being made for members of the Royal Irish Constabulary who retired from the force before the recent disbandment and who have been driven from their homes in Ireland and forced to take refuge in England or Northern Ireland or elsewhere?

The CHIEF SECRETARY for IRELAND (Sir Hamar Greenwood): Any such pensioner may apply for assistance to the Committee presided over by my hon. and gallant Friend the Member for Chelsea (Sir S. Hoare) with the assurance, that his application will be sympathetically considered. If he is still in Ireland, and requires assistance to leave that country, he should apply to the Assistant Under-Secretary in Dublin Castle, who will provide him with warrants for himself and his dependants and will advance him a sum of money and the Committee has informed the Assistant Under-Secretary that they will refund the cost of such warrants, and any advance up to £20. This is, of course, in addition to any assistance which the Committee may deem right to afford after the pensioner's arrival in this country.

Captain Viscount EDNAM: Has the right hon. Gentleman taken steps to have these facts made known to the members of the Royal Irish Constabulary?

Sir H. GREENWOOD: The Noble Lord knows that this refers only to Ireland and to ex-members of the Royal Irish Constabulary, and if the facts are not already known, I shall deem it my duty to make them known.

Captain FOXCROFT: 7.
asked the Chief Secretary whether the Irish Office have reconatnended the Treasury to grant a pension of £140 per annum to Patrick Taylor, ex-Royal Irish Constabulary, on the basis of 22 years' service in the Royal Irish Constabulary whether, at the same time, they recommend the deduction of £126 per annum of this pension on the ground that he has been granted a wound pension from the War Office; and whether, if this be so, he can state the reason for not paying these two pensions which Patrick Taylor has earned in two capacities?

Sir H. GREENWOOD: No definite recommendation has yet been made in this ease, but I am most anxious to secure
the highest possible pension for Mr. Taylor payable under the enactments applying to his case, and am in communication with the Treasury on the subject.

Sir J. BUTCHER: If a man has been wounded while in the Army and got a pension, will the right hon. Gentleman take care that his Army pension is not deducted from his Royal Irish Constabulary pension?

Captain FOXCROFT: Does the right hon. Gentleman know that men have been waiting for many months, and have had no answer whatever?

Sir H. GREENWOOD: I am not aware of that. The first I heard of this was yesterday. I will naturally see that Mr. Taylor gets the very maximum pension which by law he can possibly receive.

FREE STATE CITIZENSHIP

Lieut.-Colonel ARCHER-SHEE: 8.
asked the Chief Secretary whether his attention has been called to Article 3 of the constitution of the Irish Free State, the provisions of which run directly counter to the British Nationality and Status of Aliens Acts, 1014 to 1918 whether a person naturalised as a citizen of the Irish Free State will become ipso facto a British subject whether a person who is a British subject, but not a citizen of the Irish Free State, will have exactly the same rights and privileges as a citizen of the Irish free State in Ireland; and whether, in the opinion of the legal advisers of the Government, this is in accordance with the Treaty, which specifically states in Article 2 that the position of the Irish Free State shall be analogous to the position of the Dominion of Canada, in which there is no duality of citizenship?

Sir H. GREENWOOD: The definition of Irish Free State citizenship in Article 3 of the draft constitution is not the definition of a national status, and therefore cannot run counter to the British Nationality and Status of Aliens Acts, 1914 to 1918. The second part of the question, therefore, does not arise. The answer to the third part of the question is in the negative, and I would refer my hon. and gallant Friend to the answers given to the hon. Member for St. Rollox (Mr. G. Murray) on the 3rd and 20th
July. As regards the last part of the question, I am advised that the arrangement proposed is not inconsistent with the position in the Dominion of Canada.

Lieut.-Colonel ARCHER-SHEE: Is the right hon. Gentleman aware that it was stated on the 6th July, in reply to a question by the hon. Member for St. Rollox, that one of the advantages of Irish citizenship was free elementary education, and can he say why British citizens are not to be given the right of free education, whereas Irish citizens are allowed it in this country?

Sir H. GREENWOOD: I can assure my hon. and gallant Friend that, as far as I know, there is no intention of debarring children of any nationality in Ireland now or in the future from elementary education.

Lieut.-Colonel ARCHER-SHEE: Can the right hon. Gentleman say whether Irish citizenship means that a person who acquires Irish citizenship becomes a British subject, as in the case of Canada, as Ireland is supposed to be treated equal with Canada in this matter?

Sir H. GREENWOOD: This is a technical question of domicile and nationality. Several questions have been answered, and I must decline to reply further than the answers I have already given.

Mr. GIDEON MURRAY: What will be the position of Irish citizens in Great Britain? Will they be British subjects, and will Irish citizens be treated as British subjects, or will the position be reciprocal?

Lieut.-Colonel ARCHER-SHEE: Is this not a most dangerous extension of this empirical experiment of Empire decentralisation?

Mr. SPEAKER: I think that these legal questions should be put on the Paper.

REPUBLICAN ARMY.

Sir J. BUTCHER: 53.
asked the Secretary of State for the Colonies how many divisions of the Irish Republican Army are now in Northern Ireland; and whether they are under the authority of the Free State Government?

The SECRETARY of STATE for the COLONIES (Mr. Churchill): I have no
information as to how many divisions of this organisation exist in Northern Ireland. They are not under the authority of the Free State Government.

Sir J. BUTCHER: Does the right hon. Gentleman remember that he informed the House a little while ago that there were two divisions of the Irish Republican Army in Belfast alone? Will he say why they are there at all, and will he make representations to whoever is responsible to clear them out?

Mr. CHURCHILL: There is nothing new in this. I said there were two divisions in the Northern Counties. It is possible there may me three, but the use of the word "division" is far-fetched, as only a few hundred people belong to these unlawful associations, which are not countenanced by the Free State Government.

Sir J. BUTCHER: Can the right hon. Gentleman give us the reason why they are there?

Mr. CHURCHILL: They are there because they ought not to be there.

LORD LIEUTENANT (GUARD).

Mr. STEWART: 54.
asked the Secretary of State for the Colonies whether the Lord Lieutenant of Ireland, when he visits Southern Ireland on public occasions, is guarded by soldiers bearing the letters I.R.A. (Irish Republican Army) on their badges?

Mr. CHURCHILL: The answer is in the negative.

POSTAL SURCHARGES.

Mr. STEWART: 55.
asked the Secretary of State for the Colonies whether his attention has been called to the fact that the receiver of a letter posted in Belfast for Dublin, with the proper British stamp, is surcharged by the authorities in Dublin as if the letter were unstamped; and what steps he proposes to take in the matter?

Mr. CHURCHILL: I am informed by the Provisional Government that no surcharge is made on letters posted with British stamps in Belfast, and addressed to any place in Southern Ireland. If a case has arisen, it is a mistake, and refund of the amount charged will be made.

FINANCIAL SETTLEMENT.

Mr. RAWLINSON: 62.
asked the Secretary of State for the Colonies what is the approximate amount of money advanced, and price of goods sold, to the Irish Free State Government since it has been established, and what the total expenditure has been by Great Britain upon Ireland since the same date?

Mr. CHURCHILL: No money has been advanced from the Exchequer to the Provisional Government since its establishment, nor have any goods been sold; but, as I have previously explained, a considerable quantity of goods have been handed over subject to a subsequent valuation, which has not yet taken place. No expenditure has been incurred upon Ireland outside the six Northern Counties other than expenditure upon Imperial services, such as, for example, ex-service men and the Royal Irish Constabulary.

Mr. RAWLINSON: Could the right hon. Gentleman give any idea as to the value of the goods so handed over, and was he informed that I raised this question on the Irish Vote the other night—when no Member of the Government was present—and told that a promise was made that the information should be given to me if I put a question down?

Mr. CHURCHILL: The goods handed over to the Irish Government, in overwhelming quantity, take the form of buildings and equipment, and furniture which has been used in the Government buildings by the Royal Irish Constabulary, and in the barracks by th0 military, as these forces have been disbanded or withdrawn. It would be a, matter of enormous labour at the present moment to produce a complete schedule of all these articles, with their valuation, but all the materials are in being, out of which can be produced such a schedule and valuation, which will be entered in the final account.

Mr. GWYNNE: Are we to understand that all these buildings and munitions were handed over to the Provisional Government without a valuation being kept, and, if so, what about the buildings that have been blown up? Surely, also, particulars have been kept of the valuation of the motor cars, armoured cars, and ammunition that have been handed over?

Mr. CHURCHILL: I have not got the materials at present, but a valuation has been made on the spot by the persons who have been concerned. A record is kept of the property that has been handed over, and a valuation can be made of that property. With regard to property that has been destroyed, the Irish Provisional Government take the position that compensation will be paid for the property that has been destroyed, and therefore the barracks that have been burnt down which were handed over will come into the general valuation.

Mr. GWYNNE: How can they be valued if they have been destroyed.

Mr. CHURCHILL: People know what these barracks were. There are plans and so on.

Mr. RAWLINSON: I did not ask any questions about barracks, but about goods supplied. Does the right hon. Gentleman tell me that no sort of estimate has been kept by the Government as to the amount of arms and the value of the arms and of the goods that have been handed over, probably in millions?

Mr. CHURCHILL: As to the arms, strict details are kept. In the case of everything of a lethal or military nature that has been handed over, a most strict account has been kept of every article that can be taken into account.

Mr. GWYNNE: What is the value?

Mr. CHURCHILL: I have not the value at the present moment, but there is no difficulty in arriving at the value of these articles for disposal purposes. They will be of the same value as if they were disposed of by the Disposal Board. It will be a small value, considering the great slump in these articles. As far as the other goods are concerned, those also are accurately known.

PUBLIC TRUSTEE.

Mr. RAWLINSON: 63.
asked the Secretary of State for the Colonies whether, as the British Government are not liable for trust funds held by the Public Trustee in Ireland, beneficiaries will have an opportunity of transferring their funds from the Public Trustee in Ireland to the custody of the Public Trustee in London?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): I fear
I can add nothing for the present to the answer which I gave my hon. and learned Friend on the 12th April.

Mr. RAWLINSON: Is the right hon. Gentleman aware that on the.12th April I was promised that an opportunity should be taken, before the Free State Government was set up, to have this matter looked into? When will it be looked into, and can the beneficiaries withdraw their money now?

Mr. YOUNG: It is receiving consideration at the present time. It is a matter in which rather complicated adjustments have to be made. In the meantime, I repeat my assurance to the hon. and learned Member that the obligation to make satisfactory arrangements to protect the interests of the beneficiaries is fully recognised.

Mr. RAWLINSON: Can they withdraw at the present time?

Mr. YOUNG: I imagine that they can.

Sir J. BUTCHER: In view of the destruction of property that is going on in Ireland, will a speedy decision be arrived at?

Mr. YOUNG: Every effort will be made to arrange this matter without any avoidable delay.

HARBOUR FACILITIES,

Lieut.-Colonel ARCHER-SHEE: 64.
asked the Secretary of State for the 'Colonies if he is aware that, under Article 48 of the Constitution of the Irish Free State, the consent of the Free State Parliament is necessary before active participation in a war; and will he state whether, in the opinion of the legal advisers of the Government, this is in accordance with Article 7 of the Treaty, which provides that in time of war and strained relations the British nation shall be afforded harbour and other facilities for defence in Ireland?

Mr. CHURCHILL: The answer to the first part of the question is in the affirmative. This Article must be read in conjunction with the preliminary words of the draft Constitution, which provide that the Constitution shall be construed with reference to the Treaty, and that, if any provision of the Constitution is
in any respect repugnant to any pro visions of the Treaty, it shall, to the extent of such repugnancy, be absolutely void and inoperative.

Lieut.-Colonel ARCHER-SHEE: Is it not a fact that Article 48 is entirely repugnant to the Treaty, in view of the fact that Article 7 of the Treaty says that we shall have these harbour facilities, which, ipso facto, brings Ireland into any war? Supposing that the Trish Parliament refuse to allow their country to go into war, does that mean that Article 7 is going to be torn up? Otherwise, what is the position of Ireland?

Mr. CHURCHILL: When the King declares war, all subjects of the British Empire and all the Dominions of the Crown are from that moment at war. As to the degree of active participation in the war, that is a matter for the self-governing Dominions to decide for themselves, and they have always been very jealous of their powers to decide.

Lieut.-Colonel ARCHER-SHEE: Is not this an entirely different case from that of the other Dominions? Was it not specially laid down in the Treaty that we should have these harbour facilities, and if we go to war, does not that mean that Ireland is brought into the war whether she wants to be or not?

Mr. CHURCHILL: So are Canada, Australia, and other parts of the British Empire brought into war by the act of declaring war, and an enemy may attack them, may attack their ships, or may imprison their citizens if he can capture them. As to the degree of active participation, that is for them.

Mr. G. MURRAY: Is such an Article as Article 48 to be found in the Constitutions of any other Dominions of the Crown?

Mr. CHURCHILL: Not in their Constitutions, but it is their constitutional practice.

Mr. MACQUISTEN: In the event of a, dispute as to the interpretation of the Treaty and Constitution, is the Privy Council to decide, or what tribunal does decide?

CIVIL AVIATION.

Captain WEDGWOOD BENN: 9.
asked the Secretary of State for Air what will
be the effect of the redistribution of duties of the Air Council on the Department of Civil Aviation?

The SECRETARY of STATE for AIR (Captain Guest): So far as Civil Aviation is concerned, the recent Order in Council redistributing the duties of the Air Council merely confirms the arrangement forecasted by me when introducing the Air Estimates, and actually in force for some months past. This is that Civil Aviation business is conducted by a Director of Civil Aviation, who is responsible to the Parliamentary Under-Secretary of State. The Under-Secretary of State is, of course, like other members of the Air Council, generally responsible to me, but, as a Minister of the Crown, he can deal authoritatively with matters of Civil Aviation policy with the advice and executive assistance of the Director of Civil Aviation and his staff.

Captain Viscount CURZON: May I ask whether this means that something is really going to be done for civil aviation, and to save this industry for the country?

Captain GUEST: The industries of the country do not depend—

Viscount CURZON: I did not say "industries," but "to save this industry for the country."

Captain BENN: Can the hon. and gallant Gentleman say whether previously civil aviation was directly represented by its Chief on the Air Council?

Captain GUEST: Yes, Sir, that is so. The appointment of the late Controller-General of Civil Aviation was peculiar to himself about three and a-half years ago, and was not necessarily regarded as a precedent.

CHINESE EDUCATION.

Mr. STEWART: 13.
asked the Under-Secretary of State for Foreign Affairs whether the Committee for considering the question of the education of Chinese have handed in their Report; whether it will be published as a Parliamentary Paper; and whether he can give now the gist of these recommendations?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The answer to the first
part of the question is in the affirmative. The question of publication will be considered, and meanwhile I think it undesirable to give the gist of the recommendations until the question, which is now under consideration, of the attitude to be adopted towards the resumption of the Boxer Indemnity payments due next December has been decided by His Majesty's Government and the other Powers concerned.

Oral Answers to Questions — EGYPT.

ELECTION.

Mr. SPOOR: 14.
asked the Under-Secretary of State for Foreign Affairs whether there is to be an election in Egypt this year; and whether the political leaders of the Nationalist movement who have not been found guilty of any offence will be at liberty to take part in it?

Mr. HARMSWORTH: As I informed the hon. Member for Dartford on the 22nd June, the election of an Egyptian Parliament is a matter which solely concerns the Egyptian Government with whose intentions I am not acquainted. The electoral law of Egypt which has not yet been enacted will presumably determine the rights to be exercised by Egyptians.

BRITISH POLICY.

Mr. SPOOR: 15.
asked the Under-Secretary of State for Foreign Affairs whether the Egyptian policy of His Majesty's Government in regard to the independence of Egypt, the support of the Cabinet of Sarwat Pasha, the deportation of Zaghlul Pasha, the holding of an election, and the relaxation of martial law, as announced on 14th March, is still the policy of His Majesty's Government; whether he has evidence that it has so far succeeded; and whether the recent arrest of the members of the Egyptian delegation and the rigid continuance of martial law are features of it?

Mr. HARMSWORTH: The policy of His Majesty's Government as announced on the 14th March remains unchanged. The peaceable and orderly Government of Egypt by Egyptians, which the recent action taken under martial law was designed to facilitate, will furnish the best proof of the success of that policy.

TANGIER.

Lieut.-Colonel J. WARD: 17.
asked the Under-Secretary of State for Foreign Affairs if the water supply of Tangier is now in the hands of a new French company; whether he is aware that the company have recently seized the lands of a British subject in pursuance of their operations; and, if so, whether he will use his influence to protect the property and interest of British subjects resident in Tangier from unnecessary and illegal interference?

Mr. HARMSWORTH: The concession for the supply of water to Tangier was granted in May, 1919, to a French company. His Majesty's Government have received no information of the seizure by this company of land belonging to a British subject. If my hon. and gallant Friend will give me further particulars of the ease to which he refers I will cause inquiries to be made into the matter.

PORTUGAL (BRITISH COAL CONTROL).

Mr. HANNON: 10.
asked the Under-Secretary of State for Foreign Affairs whether he is aware that, notwithstanding a loan of £3,000,000 from this country to Portugal, the Portuguese Government has repudiated without redress a contract with a British firm of up to 36,000 tons of Welsh coal per month over 12 months, involving a credit of £540,000, approved for this purpose under the Trade Facilities Act, 1921; whether the injury done to this firm will receive his immediate attention; and what steps he proposes to take in the matter?

Sir P. LLOYD-GREAME (Parliamentary Secretary, Overseas Trade Department): I am aware that a credit in respect of a contract for the supply of Welsh coal to the Portuguese Government was granted last autumn under the Overseas Trade Acts to a British firm, and that the Portuguese Government has since cancelled the contract. Strong representations have been addressed to the Portuguese Government on the matter, but unfortunately without effect. I should add that no loan has been granted to Portugal, as stated by my hon. Friend, but a credit of £3,000,000 for exports to that country
has been negotiated with the Export Credits Department by the Banco Nacionale Ultramarino, and has been sanctioned with the approval of the Advisory Committee to the Department.

Mr. HANNON: Was not £1,000,000 of that credit allocated to coal purchases abroad, and was not the contract in question approved by the Minister of Commerce of Portugal, and subsequently by the Council of Ministers; and this is the contract now being cancelled?

Sir P. LLOYD-GREAME: The hon. Gentleman has put two points. The transactions under the £3,000,000 credit will be approved as they are brought forward. This is not a credit to the Portuguese Government. In regard to the second point, the contract was certainly entered into by the appropriate Minister on behalf of the Portuguese Government. I believe it is alleged that the contract was not approved by the Council of Ministers; but this is challenged. In any case, it was a contract definitely made by the Minister on behalf of his Government. It was on those grounds that strong representations were made.

Mr. HANNON: Will my hon. Friend use what diplomatic influence he can to impress upon Portugal the necessity of keeping contracts made?

Sir P. LLOYD-GREAME: That is exactly what I have been doing.

Sir H. BRITTAIN: How many times has the Portuguese Government been changed since this contract was signed?

Sir P. LLOYD-GREAME: I should like notice of that.

CONVICTS (CONVEYANCE TO PRISON).

Sir R. NEWMAN: 18.
asked the Secretary of State for the Home Department. whether any steps can he taken to avoid convicts conveyed from one prison to another being exposed to the public gaze for long periods of time in public places like railway stations chained together and dressed in convict clothes; and whether a less conspicuous and more humane method can be adopted in future arrangements?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): Prisoners are now taken from one prison to another in ordinary clothes, not in prison garb. It has not been found possible to dispense with the connecting chain in all cases, but care is taken to avoid exposure to the public gaze so far as circumstances allow.

MOTOR CYCLES (PILLION-RIDING).

Mr. R. YOUNG: 19.
asked the Home Secretary whether his attention has been called to the large number of fatal accidents to pillion-seat riders of motor cycles, and especially to the recommendation of the jury who returned a verdict of accidental death on a 17-year-old girl, at Deptford, that legislation should be formulated to prohibit pillion riding; and whether he intends to take any steps to lessen the number of such accidents?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I have been asked to answer this question. My attention has been drawn to the recommendation of the jury in the case referred to, and a representative of the Ministry of Transport was present at the inquest. From the evidence given before the coroner, it would appear that the accident was due to an error of judgment on the part of the motor cyclist. As regards the last part of the question, I would refer my hon. Friend to the answer given on the 1st August to the hon. Member for East Aberdeen, of which I am sending him a copy.

Lieut.-Commander KENWORTHY: Is the hon. Gentleman aware that the very heavy tax on the side-car makes it impossible for many of these men to afford them, and, therefore., they have to carry their friends on the pillion, and will he represent that to the Chancellor of the Exchequer?

Mr. NEAL: There is no foundation for that, because they do purchase side-cars.

Sir H. BRITTAIN: They carry them on the pillion as well as in the side-car, and why not?

Mr. NEAL: Certainly! [HON. MEMBERS "Why not!"]

PEDESTRIANS (RULE OF THE ROAD).

Lieut.-Colonel ARCHER-SHEE: 22.
asked the Home Secretary whether he has considered the question of setting up a. Committee to inquire into the advisability of introducing legislation to make a statutory rule of the road for pedestrians, and as to whether that rule should differ in towns and in the country roads where there are no pavements or footpaths?

Mr. SHORTT: The answer is in the negative.

Lieut.-Colonel ARCHER-SHEE: In order to remove doubts, would the right hon. Gentleman say whether it is right. to keep to the right or right to keep to the left, and therefore wrong to keep to the right; may I also ask the right hon. Gentleman whether he will take steps to alter the law to make all vehicles keep to the right, so that everybody would keep to the right, and everything would be all right?

Mr. SPEAKER: That sounds like a Civil Service examination.

GREECE AND TURKEY.

Lieut.-Commander KENWORTHY: 25.
asked the Prime Minister whether any further steps have been taken to bring about a peace between Greece and Turkey; whether a conference or armistice, or both, has been arranged between the belligerents; and whether His Majesty's Government has made it clear to the Greek Government that a continuance of hostilities in Asia Minor will be looked upon with disfavour?

The PRIME MINISTER (Mr. Lloyd George): In regard to the first part of the question, negotiations tie still proceeding between His Majesty s Government and their Allies, and I can add nothing to the statements which have recently been made. The answer to the second part of the question is in the negative. In regard to the third part of the question, the views of His Majesty's Government on this subject are perfectly well known to both 'belligerents, but, since the armistice proposed by the Allies last March was accepted by the Greeks and not by the Turks, further representa-
tions to the former in the sense suggested would appear to be somewhat out of place.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that this may be known to the two belligerents, but it is certainly not known in this country?

The PRIME MINISTER: indicated dissent.

Mr. T. P. O'CONNOR: Did not Greece many months ago declare her readiness to accept terms of peace, and has not the delay come from the recalcitrance of the Angora Government?

The PRIME MINISTER: I cannot deal with a controversial subject like this in the course of question and answer, but if the subject were raised in Debate I should state my views.

Mr. MALONE: Did not the Turks wish to discuss the matter?

Lieut.-Commander KENWORTHY: 32.
asked the Prime Minister whether he has any information of an attempt to set up an independent Greek State in Smyrna and district, under the protection of the Greek army; and whether it has been made clear to the Greek Government that any such action will receive the disapproval of His Majesty's Government?

Mr. T. P. O'CONNOR: Before the right hon. Gentleman answers this question, may I ask whether the papers have not contained reports of deputations representing all the different communities in Smyrna, Jewish, Mahommedan, Armenian and Greek, approving of the administration of the present High Commissioner, and begging that it should be continued and will the right hon. Gentleman say whether the Government contemplate handing back the country to the Turks, with the risk of plunder and massacre to the population there, which is now satisfied and well governed under the present rule?

The PRIME MINISTER: We have no official information with regard to the first part of the question put by the hon. Member for the Scotland Division (Mr. O'Connor), but. I understand that a memorial of that kind has been received.
With regard to the second part of the hon. Member's question, I could not give an answer which would not be of a highly controversial nature, and it is a subject which is not suitable for question and answer across the Floor of the House. If the question is raised in debate, a reply will be given to it.
According to such information as Majesty's Government possess, the recent Greek measures in Asia Minor do not constitute Ionia into an independent Slate, although some degree of local autonomy appears to have been established, and promises have been made to protect the local Christians from deportation and massacre. Fuller details are awaited.
In view of the fact that any action taken by the Greeks at present is, obviously, subject to the provisions of a final settlement, no representations to the Greek Government on the part of His Majesty's Government appear to be called for.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that a movement is on foot to imitate the example of d' Annunzio and Zilagowski and set up an independent Greek State in Smyrna backed by the Greek Army? Have we made it clear that we shall use all the means at our disposal to bring pressure to bear on the Greek Government in such an event? As no satisfactory answer has been given, I beg to give notice that I shall raise this question again on the Motion for the Adjournment?

Mr. MALONE: 37.
asked the Prime Minister whether he has any information to give the House as to whether the Greek Army has continued to advance on Constantinople since the Allied Notes were addressed to the Greek Government; and whether, in view of the serious consequences which a Greek occupation of Constantinople would have, he will give the House an assurance that the Government will take measures to prevent the Greeks from occupying Constantinople while Parliament is in Recess?

The PRIME MINISTER: The answer to the first part of the question is in the negative, and to the second part in the affirmative.

Oral Answers to Questions — PEACE TREATIES.

GERMAN TAXATION.

Sir J. BUTCHER: 26.
asked the Prime Minister whether the Reparations Commission have had their attention drawn to Annex II, 12 (b), of the Treaty of Versailles, which provides that the Commission shall examine the German system of taxation, first to the end that sums for reparation which Germany is required to pay shall become a charge on all her revenues prior to that for the discharge or service of any domestic loan, and secondly so as to satisfy itself that in general the German system of taxation is fully as heavy, proportionately, as that of any of the Powers represented on the Commission; what, if any, is the result of the examination of the Commission into these two points; and whether the Supreme Council will insist on the immediate observance of this Clause of the Treaty?

Mr. YOUNG: The matters referred to in the first part of the question are continually engaging the attention of the Reparation Commission. In reply to the second and third parts of the question, I would ask the hon. Member to await the statement that will be made during the Debate on the Appropriation Bill.

Mr. ARMSTRONG: 50.
asked the Chancellor of the Exchequer whether the taxes in the part of Germany occupied by the British forces are collected by the German authorities or by the British; and whether the money collected by either is applied in reduction of the cost of the Army of Occupation?

Mr. YOUNG: The taxes are collected by the German authorities. The answer to the second part of the question is in the negative.

EASTERN GALICIA.

Mr. MOSLEY: 35.
asked the Prune Minister whether the Polish Diet has included Eastern Galicia in the Electoral Bill recently introduced; and, if so, whether representations will be made concerning this violation of Article 91 of the Treaty of St. Germains?

Mr. HARMSWORTH: I have no information to show whether Eastern Galicia has been included in the
Electoral Bill recently introduced into the Polish Diet. The second part of the question therefore does not arise.

Mr. MOSLEY: has the hon. Gentleman made any inquiries about the reports in the Polish Press?

Mr. HARMSWORTH: Yes. I stated yesterday that we wore making inquiries.

Mr. MOSLEY: When will the hon. Gentleman he able to give me an answer?

Mr. HARMSWORTH: I cannot say.

GERMAN REPARATION.

Sir W. DAVISON: 45.
asked the Chancellor of the Exchequer whether any arrangement has yet been arrived at with the German Government in connection with their indebtedness to this country to furnish a substantial part of the raw timber annually imported into this country from abroad, amounting during the past three years to the value of about £170,000,000, having regard to the large area of Germany which is under scientifically planted forests which were practically untouched during the War?

Mr. YOUNG: Yes, Sir. Arrangements were made early this year for timber to be delivered in payment of reparation to this country. The maximum figure fixed for 1922 deliveries to this country is 2,000 standards of the value of about, £3½ millions, but owing to delays and other causes it is not expected that more than about one quarter of this will be delivered within the year. The amount for 1923 is under discussion, but will be much larger than in 1922.

Sir W. DAVISON: Can the hon. Gentleman give any explanation as to why such a very paltry amount of timber is being delivered by Germany, seeing that one-fourth of the German Empire is under scientifically planted forests?

Mr. YOUNG: I will make inquiries and let my hon. Friend know the result.

Sir W. DAVISON: 46.
asked the Chancellor of the Exchequer whether any request has been addressed to the German Government that they would obtain from their nationals, as was done in this country during the War, the scrip and other securities in respect of the large investments made by Germans in the United States and other foreign countries before,
during, and subsequent to the War, whereby Germany is evading payment of her debts, so that the said securities can be deposited with the Allied Governments as some security in respect of German indebtedness, and especially to assist the Allies in meeting their heavy debt to America?

Mr. YOUNG: The answer is in the negative.

Sir W. DAVISON: Will the hon. Gentleman say why the Treasury thought it proper to make a demand of this kind when this country was in urgent need of money during the War and they do not think it proper to make a similar demand on Germany who owes us so much money?

Mr. YOUNG: This again raises a delicate question, and I would rather the hon. Member put it down on the Paper.

Sir W. DAVISON: Is the hon. Gentleman aware that I have raised this question with the Chancellor of the Exchequer for months past? It is a matter of very great importance, whereby this country can get millions out of Germany. Germany is avoiding her debts in this way.

Mr. YOUNG: I am perfectly convinced that any relevant suggestion made by the hon. Member will receive the most careful consideration of the Chancellor of the Exchequer.

Sir W. DAVISON: Will the hon. Gentleman give it further consideration and advise me during the recess what his decision is so that it can be made public?

Mr. YOUNG: I will certainly draw the further attention of the Chancellor of the Exchequer to the hon. Member's view.

Oral Answers to Questions — AIR DEFENCE.

COMMITTEE OF IMPERIAL DEFENCE.

PRIME MINISTER'S STATEMENT.

Viscount CURZON: 27.
asked the Prime Minister whether the Government have yet been able to consider the question of the control and provision for the air arm of the Royal Navy; whether the Government are satisfied that adequate provision is being made to meet the Admiralty requirements for fighting, reconnaissance, and spotting planes; and whether better
provision in these respects and actual economies can be made if a reorganisation of the branch of the Royal Air Force operating with the Royal Navy is carried out and the Royal Navy made responsible for and be given control of its air arm?

Sir H. BRITTAIN: 28.
asked the Prime Minister whether the Imperial Defence Committee has reached any decision which will enable production orders to be given forthwith to the recognised British aircraft and aero-engine firms, so that they may find it possible to keep their works going and their experienced staffs together until the House reassembles in November?

Captain BENN: 34.
asked the Prime Minister whether the Imperial Defence Committee has decided that the Navy will be permitted to supply and control aircraft of its own?

The PRIME MINISTER: The Government, as the result of an inquiry by the Committee of Imperial Defence, have decided to adopt a scheme submitted by the Air Ministry providing a force of 500 machines for home defence at an increased cost of £2,000,000 per annum. £900,000 out of the total of £2,000,000 will be found by economies in the Estimates of the Air Ministry.
The inquiries of the Cabinet Committee on Economy in the Fighting Services have advanced sufficiently far to enable me to state that the addition to the Air Estimates will not prevent a reduction in the total estimates of the three fighting services for the year 1923–24.
Considerable orders in execution of this programme will be placed with private firms in the current calendar year.
The foregoing decisions will not prejudice a further expansion of the Royal Air Force if later on this is found necessary to our national security. This question will be considered in the light of the financial situation next year and of the air policy adopted by other Powers.
The inquiry into the system of naval and air co-operation, and as to the best method of securing that the Air Force should render to the Navy the aid it may require, has not yet been completed.

Lieut.-Colonel FREMANTLE: Will the right hon. Gentleman reply to Question 33, and as regard the subsidiary services?

The PRIME MINISTER: That is a matter regarding which the inquiry is still proceeding.

Lieut.-Colonel FREMANTLE: Will the reports be published?

Colonel WEDGWOOD: Is the enormous increase in the expenditure on the Air Force due to the enormous development of the Air Service in France?

The PRIME MINISTER: Well, we have to take all the circumstances into account.

Sir W. JOYNSON-HICKS: Is the answer of the right hon. Gentleman in lieu of the proposed statement that we understood the Prime Minister would make to-morrow; will he make no further statement?

The PRIME MINISTER: No.

Sir W. JOYNSON-HICKS: Then the matter cannot be debated?

The PRIME MINISTER: That is a matter for Mr. Speaker, and not for me, but I should have thought it could have been discussed on the Adjournment Motion.

Oral Answers to Questions — HONOURS LISTS.

ROYAL COMMISSION.

Lord ROBERT CECIL: 30.
asked the Prime Minister whether he can now announce the names of the Royal Commissioners on the distribution of honours; what is to be their reference; and, particularly, whether the reference will permit them to inquire what donations, if any, recipients of honours have made to party funds?

The PRIME MINISTER: Although the composition of the Royal Commission is not yet complete, as the House is adjourning to-morrow, I will give the names of those who have already promised to serve:—

Lord Dunedin (Chairman).
Lord Denman.
My right hon. Friend the Member for Widnes (Mr. Arthur Henderson).
My right hon. Friend the Member for Aston (Sir Evelyn Cecil).
My hon. and gallant Friend the Member for Chelsea (Lieut.-Colonel Sir Samuel Hoare).
My hon. Friend the Member for the Northern Division of Cornwall (Sir George Croydon Marks).
The Duke of Devonshire has also been invited, and I hope he will accept, although we have not yet received a final reply from him.
The terms of reference will be those read out in the course of the Debate in this House and in another place, and accepted by those who moved and seconded the Motion in both Houses:—
To advise on the procedure to he adopted in future to assist the Prime Minister in making recommendations to His Majesty of names of persons deserving special honour.

Lord R. CECIL: Can the right hon. Gentleman answer the second part of the question as to whether the reference will permit them to inquire what donations, if any, recipients of honours have made to party funds?

The PRIME MINISTER: Of course it is not for me to interpret the terms of reference. That is the duty of the Chairman of the Committee. I should have thought that was obvious.

Mr. HOWARD GRITTEN: Does that mean that there is to be no retrospective inquiry?

Captain W. BENN: What powers will the Commission have? Will they have power to take evidence on oath and to send for witnesses?

ENVER PASHA.

Lieut.-Commander KENWORTHY: 31.
asked the Prime Minister what is the present situation of Enver Pasha and his adherents in Bokhara and Turkestan; whether His Majesty's Government or the Government of India is in communication with Enver, either directly or indirectly, officially or unofficially; and whether there is any understanding or arrangement of any sort between him and the agents of either Government?

The PRIME MINISTER: His Majesty's Government have little recent information of any value on this subject, and I can add nothing useful to the reports which have appeared in the Press. The answer to the second and third parts of the question is in the negative.

WHITE CITY EXHIBITION (WORK-MEN'S WAGES).

Captain O'GRADY: 36.
asked the Prime Minister whether he is aware of the fact that the British Legion are supplying men to the manager of the White City Exhibition, London, on stand-fitting work at a less rate of wages than that laid down in the agreement between the management and the Exhibition Stand Fitters' Association and the trades unions representing the various classes of workmen employed, and that in some cases men are employed there to do carpenters' work at 18s. per week less than the carpenters' rate of wages; that unions and the association concerned, failing to get an understanding on this matter with the directors of the White City, have refused to allow their members to continue at work; and, having regard to the circumstances of the times and the discontent that such action is creating, will he take steps to bring this state of affairs to a. conclusion satisfactory to both the ex-service men and the trade unionists affected?

The MINISTER of LABOUR (Dr. Macnamara): I have been asked to reply. I am informed by the British Legion that they have not supplied men to the manager of the White City Exhibition for stand fitting work; that, the Legion supply men only on condition that the proper rates of wages are paid; and that the Legion have discussed the position with trade unions concerned and satisfied them as to their action. However, in view of the statements made in the last part of the question, I will see whether I can properly make any further inquiry.

WAR DEBTS.

Mr. MALONE: 38 and 39.
asked the Prime Minister (1), whether, at the forthcoming visit of the Prime Minister of the French Republic, the question of reparations alone will be discussed or whether the Government will, at the same time, endeavour to reach some understanding on the question of Allied indebtedness;
(2) whether His Majesty's Government will take steps to call a general conference of the Allies with a view to settling the war debts before the British delegation proceeds to Washington in Septem-
ber to deal with the question of this country's war debts to the United States?

The PRIME MINISTER: I would ask the hon. Member to await the statement that will be made during the Debate on the Appropriation Bill.

NAVAL EXPENDITURE, CANADA.

Commander BELLAIRS: 40.
asked the Prime Minister whether he is aware that Canadian representatives at the Imperial Conference of 1909 sought the advice of' the Admiralty in order to carry out the Resolution of the Canadian Parliament of 29th March, 1909, on the basis of an annual naval expenditure of £400,000 or £1600,000 per annum, including the maintenance of Esquimalt and Halifax dockyards; whether the Admiralty supplied them with two plans for building and maintaining cruisers and destroyers; whether this contribution was ever made in the way the Imperial Government were led to believe it would be made; and what is the naval expenditure of Canada to-day?

The PRIME MINISTER: The answer to the first part of the question is in the affirmative. As regards the second part, the Admiralty supplied plans and specifications of cruisers and destroyers. I understand that the, Dominion Government did not build the cruisers or destroyers, but have maintained the Esquimalt and Halifax dockyards. The naval expenditure of the Dominion for the 11 months ended 25th February, 1922, was 1,791,129 dollars.

Oral Answers to Questions — EDUCATION.

SCHOOL TEACHERS (SUPERANNUATION) ACT, 1918.

Mr. AMMON: 41.
asked the Chancellor of the Exchequer why it has been considered necessary to include the name of one woman among the 12 persons invited to serve on the Departmental Committee to consider the School Teachers (Superannuation) Act, 1918; and can he state the number of men teachers and the number of women teachers whose pensions will come under review?

Mr. YOUNG: With regard to the first part of the question, appointments to the Committee have been made on the
ground of personal qualification and without regard to sex. As regards the latter part, I estimate that the numbers are approximately 52,500 men and 143,500 women.

Mr. AMMON: Can an answer be given as to whether there is a woman or women amongst those who have been appointed?

Mr. YOUNG: I am afraid that I have not got the actual name before me at the moment.

Captain BENN: Does the hon. Gentleman think it proper that a Committee so much concerned with the interests of women should be without an adequate representation of women?

Mr. YOUNG: That is a question for the Prime Minister.

Mr. AMMON: I have asked whether there are any women on the Committee, and I think that an answer ought to be forthcoming to my question.

SECONDARY SCHOOL GRANTS.

Mr. BIRCHALL: 69.
asked the President of the Board of Education whether, seeing that the effect of Circular 1259, referring to secondary school grants, will be to transfer expenditure from the taxes to the rates, he will suspend the operation of the circular until the basis of the grant and rate-aid has been reconsidered?

The PRESIDENT of the BOARD of EDUCATION (Mr. Herbert Fisher): I may refer the hon. and gallant Member to the reply given on the 14th June last to the hon. Member for the Thornhury Division of Gloucestershire (Mr. A. Kendall).

Major WHELER: Does the right hon. Gentleman know that this Order is causing a great deal of dissatisfaction to many county and municipal authorities?

Mr. FISHER: I am completely aware of that.

PROPERTY REVALUATION.

Mr. WISE: 43.
asked the Chancellor of the Exchequer the nature of the steps
proposed or now being taken for the revaluation of property for the purposes of taxation?

Mr. YOUNG: Under the provisions of the Finance Act, 1922, steps are now being taken to revalue all properties in England and Wales, except properties in the Administrative County of London, with respect to which the valuation list for rating purposes is made conclusive for the purposes of Income Tax. Forms of return will shortly he issued by the assessors of Income Tax, and the General Commissioners will, in due course, issue notices of assessment and will hear and determine appeals against the annual values assessed.

Mr. GWYNNE: What will be the cost of the revaluation?

Mr. YOUNG: I cannot say.

Mr. GWYNNE: Has no estimate of the cost been made?

Mr. YOUNG: I must have notice of that question.

TEMPORARY WOMEN CLERKS (PAY)

Mr. MYERS: 47.
asked the Chancellor of the Exchequer whether he is aware that the Treasury proposals for the future payment of temporary staffs give a basic minimum to Grade 4 women clerks which is lower than the factory workers' minimum laid down by Mr. Seebohm Rowntree after prolonged investigations as the lowest standard wage upon which health could be maintained by an individual woman without dependants: that the majority of Grade 4 temporary women clerks have others wholly or partly dependent upon them and in London considerably higher fares than are usual for the women with regard to whom Mr. Rowntree's investigations were made; and whether he will cause the proposals o be reviewed in view of the fact that they would bring the w omen clerks concerned below the figure laid down for certain sweated trades as trades boards' minima or will consent to the women's case being investigated by the Industrial Court?

Mr. YOUNG: The large majority of temporary women clerks are in Grade 3.
Women in Grade 4 are for the most part under 21 years of age, and are engaged on semi-manipulative duties. In cases where adult women are employed in Grade 4, the minimum rate which is now, in London 40s. or 43s. a week (varying with the normal weekly attendance required), would, under the Treasury proposals, be reduced to 36s. 1d. or 38s. 10d. a week. These amounts do not, so far as I am aware, conflict with any minimum rate laid down by Mr. Seebohm Rowntree, and they are certainly in excess of the general level of minimum rates prescribed by Trade Boards for adult women in various industries. In these circumstances the remainder of the question does not arise.

Mr. MYERS: Can the hon. Gentleman agree to either of the two alternatives contained in the latter part of the question?

Mr. YOUNG: No. I think, in view of the facts set forth in the first part of my answer, it is not possible to agree to either of the suggestions.

KENYA COLONY (JUNIOR POST-MASTERS).

Mr. AMMON: 52.
asked the Secretary of State for the Colonies whether he is aware that, as a result of representations, it was laid down that junior postmasters in Kenya Colony should be entitled to first-class travelling facilities between Kenya Colony and Great Britain; that. this decision was confirmed by Colonial Office despatch of 9th September, 1920; is he aware that without notice to the officers concerned this privilege has been withdrawn by Colonial Office Despatch 744, of the. 18th May, 1922; and, having regard to the inequalities created by the recent decision, will he restore the privilege which the men have enjoyed for the last two years?

Mr. CHURCHILL: The expectation of first-class passages for junior postmasters was held out at a time when it was believed to be the desire of the local Government to grant that privilege. When it was found that a misunderstanding had occurred, the privilege was confined to those who had definitely been promised it as a condition of their appointment. I have had no previous indication
that the decision was not fully accepted by the officials concerned, and, while I am reluctant, in the interests of economy, to reverse the intentions of the local Government, I will go into the matter further with the Governor.

GOLD COAST COLONY.

Mr. MYERS: 56.
asked the Secretary of State for the Colonies whether he is aware that the Governor of the Gold Coast is employing nearly 1,000 white officials for an area of less than 90,000 square miles and a population of less than 2,000,000 of people; that the Governor of Nigeria is employing about 600 white officials for an area of 300,000 square miles and a population of over 15,000,000 of people; and if he can explain the reason for this anomalous situation?

Mr. CHURCHILL: The hon. Member is misinformed. The number of white officials in the Gold Coast on the 31st December, 1921, was 946, and in Nigeria on the same date, 2,009, and these numbers have not materially altered. The higher proportion of white officials in the Gold Coast no doubt indicates that in proportion to area and population the construction of new works is being undertaken in that Colony on a larger scale than in Nigeria. It is also the case that the system of indirect government through the native administrations is more fully developed in Nigeria where it is therefore unnecessary to retain as many European politiical officers in proportion to area and population as are required in the Gold Coast.

Mr. PENRY WILLIAMS: 57.
asked the Secretary of State for the Colonies whether he is prepared to give an undertaking that, when the harbour works of Takoradi are completed, no steps will be taken to force shipping companies or merchants to load export cargoes only from that port in the Gold Coast Colony, and that shipping lines' and merchants' chartered vessels will be as free from administrative pressure in future as heretofore to load from any or all other ports in the Gold Coast Colony?

Mr. CHURCHILL: I am not clear what the hon. Gentleman has in mind. As far as I am aware, there has never been any suggestion of any compulsion
being applied to shippers to use Takoradi in preference to other ports, though it is probable that the greater facilities which will be available when the Takoradi harbour works are completed will induce them to use that port as far as possible. As a matter of fact, the Gold Coast Government is at present spending at least £100,000 upon the improvement of the harbour at Accra.

Mr. P. WILLIAMS: 58.
asked the Secretary of State for the Colonies whether, seeing that His Majesty's Government, in authorising the expenditure on Takoradi harbour and railway works, has stated that the capital expenditure must he limited to £1,600,000, and that the present Estimates of the Gold Coast Colony include a sum of £30,000 for the survey alone of a prospective railway from Takoradi to Kotoku, he will say whether this survey has been sanctioned by His Majesty's Government: and, if so, for what purpose?

Mr. CHURCHILL: A sum of £6,000 has been provided in the current year's Estimates of the Gold Coast, as a first instalment of the cost of the survey of a proposed new railway in the Central Province of the colony. The total cost is estimated at £30,000. The purpose of the projected railway is to provide transport facilities in this part of the colony, especially with a view to the development of cocoa districts which have not hitherto been opened up. Such improvement of transport facilities is recognised as necessary in itself, apart from the relation of the proposed new railway to the harbour now under construction at Takoradi.

Colonel WEDGWOOD: Are we to understand that there has been any pressure from traders for this railway or was this authorised solely on the advice of the Colonial Office?

Mr. O'CONNOR: Is it not the fact that this port opens great possibilities—greater than ever existed before, for the development of this very rich colony, and has it not been approved by public opinion in tile colony itself?

Mr. CHURCHILL: Yes, Sir, it opens up great possibilities. Of course, it is a very serious undertaking. The colony will be vastly richer and more efficient when
it is completed than it at the present moment. I really do not understand the question put by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood).

Colonel WEDGWOOD: Has the undertaking the approval of the people on the spot? Do they want to incur expenditure on this port and railway?

Mr. CHURCHILL: The hon. and gallant. Gentleman knows exactly what are the methods by which these different colonies are governed. The usual procedure has been followed here. If he is not aware of that, I can understand why he asks so many questions on the subject.

Colonel WEDGWOOD: It is almost impossible to ask question of the Minister for the Colonies because one is habitually insulted. In this case may I ask whether the Chamber of Commerce on the Cold Coast have or have not approved of his spending this money on this public works scheme?

Mr. CHURCHILL: I must have notice of that question.

Colonel WEDGWOOD: Why?

Mr. SPEAKER: The hon. and gallant Member, in asking his original question, put, it in a form which carried an implication, whether it was intended or not. He had better place any further questions on the Paper.

Colonel WEDGWOOD: But may I ask—

Mr. SPEAKER: The hon. and gallant Member had better put his question down.

Mr. LAWSON: 59.
asked the Secretary of State for the Colonies whether he is aware that some 20,000 tons of cocoa, valued at nearly £1,000,000 sterling, were left last year ungathered on the trees of the Gold Coast Colony: and what steps he proposes to take to prevent a repetition of this loss during the forthcoming harvest?

Mr. CHURCHILL: I have no information as to the actual amount of cocoa left ungathered in the Gold Coast last year. There is little doubt that a portion of the crop was left ungathered; and the greater part of this would probably be in the less accessible districts, in which, owing to the lack of transport facilities
and to the poor price which the product commanded, it did not pay the farmer to market his crop. It is realised that the low price was in part due to the poor quality of the cocoa; and the Gold Coast Government is endeavouring to prevail on the farmers to adopt better methods of cultivation with a view to improving the quality of the crop. It is also part of the general policy of the Government to improve communications throughout the Colony, thereby opening up the more remote cocoa-bearing districts.

Lieut.-Commander KENWORTHY: May I ask if the right hon. Gentleman is giving his personal attention to this cocoa question?

Mr. CHURCHILL.: I take a great interest in it.

JAMAICA (FIRE).

Mr. HANNON: 60.
asked the Secretary of State for the Colonies whether he has any further information regarding the extent of, and damage done by, the recent fire in Jamaica?

Mr. CHURCHILL: No report has yet been received from the Governor of Jamaica with regard to the fires in the parish of Clarendon, and I have no information beyond what has appeared in the Press. Inquiry has been made of the Governor by telegraph.

TANGANYIKA (EXPENDITURE).

Mr. HANNON: 61.
asked the Secretary of State for the Colonies why the expenditure in the Tanganyika Territory shows an increase entirely disproportionate to that resultant on the conversion of the 1s. 4d. rupee to the 2s. florin; and what measures he is taking to effect reductions?

Mr. CHURCHILL: The change in the East African currency affected the actual expenditure of the Tanganyika Territory in 1921–22 only in so far as money had to be supplied from outside the territory for purposes of local payments. Every effort has been made during the last few years to reduce the ordinary expenditure of the territory to the smallest possible limit, but the special circumstances of the territory, which during the War was almost continuously the theatre of active military operations, make it essential
that substantial sums should now be devoted to capital expenditure upon the repair and improvement of railways and public works, in order that the territory may develop its trade with a view to paying its way.

Mr. HANNON: Is that the cause, of the increase?

Mr. CHURCHILL: That is the main cause.

SPRAY DISINFECTION.

Sir WALTER de FRECE: 70.
asked the Minister of Health whether his attention has been called to the denunciation, at the recent meeting of the Royal Sanitary institute at Bournemouth, of the spray form of disinfectant; whether this view is held by his sanitary advisers, and whether the views of his advisers, whatever they are, are available for public guidance on this point?

The MINISTER of HEALTH (Sir Alfred Mond): My attention has been called to Press reports of the statement referred to. The opinion of my advisers on the point is expressed in the Memorandum on Prevention of Influenza, issued by the Local Government Board in 1919, of which I will send my hon. Friend a copy, and which states that the practice of spraying halls and places of public resort with a disinfectant fluid is of doubtful utility, and only tends to create a false sense of security.

LEAGUE OF NATIONS.

Lord ROBERT CECIL: 29.
asked the Prime Minister whether he can now say who are to be the delegates and substitute delegates representing this country at the assembly of the League of Nations at Geneva: and whether he himself will be able to be present at any of its sittings?

The PRIME MINISTER: I am not able to answer this question now. I hope to be able to do so to-morrow.

Lord R. CECIL: Perhaps then I may be allowed to repeat the question tomorrow.

The PRIME MINISTER: Yes.

Lord R. CECIL: (later): Can the Prime Minister now reply to No. 29?

The PRIME MINISTER: The names of the representatives of the British Government at the meeting of the League of Nations at Geneva are my Noble Friend the Lord President of the Council, my right hon. Friend the President of the Board of Education, and my hon. and gallant Friend the Member for Stoke-upon-Trent (Lieut.-Colonel J. Ward).

Lord R. CECIL: Can the right hon. Gentleman reply to the last part of my question, as to whether he himself will be able to attend at any part of the proceedings? Does he realise that it will be quite possible for him to go only for two or three days, and to deliver a speech on disarmament or some other question of great international importance.

The PRIME MINISTER: There I am leaving myself in the hands of the representatives of the Government. The same suggestion was put to me by them, and I am leaving myself in their hands and shall wait their further suggestion.

Mr. GRITTEN: Is it not more necessary for the right hon. Gentleman to remain in this distressful country?

Viscountess ASTOR: Can the right hon. Gentleman say whether a woman will be sent in an advisory capacity?

The PRIME MINISTER: That was also considered by the Government, and it has been decided that that shall he done.

MEASLES AND SCARLET FEVER.

Sir W. de FRECE: 71.
asked the Minister of Health whether his latest reports show any increase in measles or scarlet fever cases; and whether he can give in each case the figures for the first half of 1922, as compared with the similar period last year?

Sir A. MOND: The total number of scarlet fever cases reported in the first six months of 1922 was 54,966, and in the corresponding period of 1921, 56,023. No increase is shown in the more recent returns, the figure remaining fairly constant at about 2,000 weekly. Notification of measles is not now compulsory throughout England and Wales, and consequently no reliable figures can be given.

HOUSING (PONTYPRIDD).

Mr. MARDY JONES: 75.
asked the Minister of Health whether his attention has been called to a resolution passed at a recent conference held at Pontypridd, in connection with the Housing and Town Planning Council, asking that building to meet the housing needs of the area be put into operation with a view to meet the housing needs and to relieve the unemployment in the district: and does he propose to take any action in the matter?

Sir A. MOND: I am au are of the resolution to which the hon. Member refers. Of the houses which have already been authorised in this locality, nearly one-half are not yet completed, and in the circumstances I am of opinion that the local authorities concerned should concentrate on the completion or the houses in hand.

Mr. JONES: Is it a tact that 2,200 houses were authorised and only 200 have been constructed?

Sir A. MOND: Still more astonishing, they have not yet completed the 200.

Oral Answers to Questions — TRANSPORT.

ROAD CONSTRUCTION.

Mr. ATKEY: 77.
asked the Parliamentary Secretary to the Ministry of Transport whether his attention has been drawn to the urgent need for the improvement and reconstruction of many main roads throughout the country: and whether he will lay proposals before the Unemployment Grants Committee so as to secure for this work the maximum possible grant in connection with any schemes to be approved in the near future for the purpose of finding work for the unemployed?

Mr. NEAL: The answer to the first part of the question is in the affirmative. I am acting in the closest co-operation with the Unemployment Grants Committee.

Lieut.-Colonel MORDEN: 78.
asked the Parliamentary Secretary to the Ministry of Transport why the unemployed of Brentford cannot obtain employment on the construction of the great west road through Brentford?

Mr. NEAL: I am informed that by an understanding between the Middlesex
County Council and the contractor, the bulk of the labour required for the first section of the great west road, which lies in Hounslow, has been drawn from that district, but that in the execution of the contract which has been signed for the second section most of the labour will probably be engaged from Brentford.

Lieut.-Colonel MORDEN: 79.
asked the Parliamentary Secretary to the Ministry of Transport why no instructions have been given to proceed with the construction of the Chiswick and Brentford portion of the north circular road from Gunnersbury Lane, which is the only section of the road not being proceeded with; and is he aware that this would give much needed employment in Brent-ford and Chiswick for the coming winter?

Mr. NEAL: The Middlesex County Council are carrying out the arterial road schemes in their area with the financial assistance of the Ministry of Transport. In the event of that council desiring to proceed with any section of the north circular road which has not yet been put in hand, I shall be glad to consider, within the limits of the funds available, any application for assistance.

HEAVY VEHICLES (REFLECTORS).

Sir PARK GOFF: 80.
asked the Parliamentary Secretary to the Ministry of Transport whether he will take immediate steps to carry out the recommendations of the Departmental Committee and issue Regulations for all chars-à-bane, lorries, vans, wagons, and other heavy vehicles to be at once provided with reflectors?

Mr. NEAL: I am advised that the, matter raised by my hon. and learned Friend's question is not one which can be dealt with by Regulation.

Sir P. GOFF: Is the hon. Gentleman aware that recently the majority of accidents have been caused by those heavy vehicles not seeing or hearing what is coming up behind them, and at this season particularly these accidents are increasing daily, and is he not aware that he has power to make Regulations at once under Section 6 (1) of the Locomotives and Highways Act, 1896?

Mr. NEAL: I am aware of the importance of the subject, and. a recommendation has been received from the
Committee which considered it in the sense the hon. Member desires. I am not aware, of the power he mentions.

Sir P. GOFF: If I am right about those powers, will the hon. Gentleman give a pledge to make Regulations at, once?

Mr. NEAL: I cannot give a pledge.

FISH (PASSENGER TRAIN RATES).

Mr. GRITTEN: 81.
asked the Parliamentary Secretary to the Ministry of Transport, in view of the fact that the 25 per cent. reduction of the rates for the conveyance of articles or commodities by goods train is of practically no advantage to the fish trade, seeing that the great majority of fish consignments are sent by passenger train, especially from the further ports, only a small balance of such consignments being sent by goods train to the nearer inland markets, and inasmuch as the maintenance of the rates for the conveyance of goods by passenger train at 75 per cent. above the pre-War level forms a, serious obstacle to the revival of a trade which has long been in a state of depression, whether he will, as soon as possible, represent to the railway companies the urgent necessity of the reduction of the rates for the conveyance of fish by passenger train?

Mr. NEAL: As the hon. and learned Member is aware, the Minister has no power over railway charges, but the provisions of the Railways Act, 1921, enable the interests concerned to appeal to the Rates Tribunal if they so wish. I have sent a copy of the hon. Member's question and my reply to the railway companies.

Mr. GRITTEN: Is the hon. Gentleman aware that the fish traders have already put their grievances before the Rates Tribunal and no concessions have been granted—I do not know whether they have even been considered—and, further, why in the case of Fleetwood alone of all the ports is fish sent by goods train charged at goods train rates instead of at passenger train rates, as in all other cases?

Mr. NEAL: I am not aware that any application has been made to the Rates Tribunal. My information is exactly the reverse. I cannot answer without notice a detailed question as to particular rates at particular ports.

RAILWAY PASSENGER FARES.

Mr. GILBERT: 82.
asked the Parliamentary Secretary to the Ministry of Transport whether the Railway Rates Tribunal has yet settled the form in which the railway companies must submit the schedules of passenger fares under the Railways Act of 1921; and if he will state if this form will require the companies to submit a schedule of workmen's fares as well as their charges for season tickets?

Mr. NEAL: I understand that the Rates Tribunal have not yet settled the form of schedule to be submitted by the railway companies in respect of standard passenger fares. As regards workmen's fares and season tickets, I would remind my hon. Friend that under the Railways Act, 1921, they will be treated as exceptional fares and the relevant sections of the Act will apply.

Mr. GILBERT: 83.
asked the Parliamentary Secretary to the Ministry of Transport whether under their present powers railway companies are compelled to run any passenger trains daily at the rate of 1d. per mile for third-class passengers: if so, how many trains are they hound to run daily; and what powers have his Department to see that the companies carry out these obligations.

Mr. NEAL: The answer to the first part of the question is in the negative. The rest of the question does not, therefore, arise.

CARRIAGE OF FRUIT (HULL).

Lieut.-Commander KENWORTHY: (by Private Notice) asked the Parliamentary Secretary to the Ministry of Transport whether his attention has been called to the action of the North Eastern Railway Company in refusing to accept highly perishable fruit for goods carriage from Hull on Monday, 7th August; if he is aware that this class of goods has always been accepted up to the present time by the railway companies, and that great inconvenience would result from the discontinuance of this practice; and if he will take any action necessary to prevent the new decisions of the company from taking effect?

Mr. NEAL: The answer to the first part of the question is in the affirmative. I am in communication with the North Eastern Railway and will advise my hon.
and gallant Friend of the result, but he will of course realise that with the decontrol of railways the Government powers of direction ceased.

Lieut.-Commander KENWORTHY: Is the hon. Gentleman aware that when the new grouping of railways was brought into force this was one of the things that we were afraid of; and the Ministry of Transport assured us that we need have no fear of such a thing happening? Will he use his utmost exertions to prevent such a thing happening?

Mr. NEAL: I cannot quite agree about that statement. There is a Clause in the Railways Act which does provide powers to obtain facilities much greater than have hitherto existed, but I do not think it could apply to a special case in regard to dealing exceptionally with traffic on Bank Holiday Monday.

Mr. WATERSON: Is the hon. Member aware that the boats land at these docks without consideration of the fact that it is holiday time, and, seeing that this is perishable traffic, can he not in the interests of the consumers use all the powers at his disposal, and ask the North Eastern Railway Company to see that this food is transmitted?

Mr. NEAL: I have said that I am in communication with the railway company. The decision mist rest with them. Personally, I should be very glad if they could see their way to give facilities.

Mr. GRITTEN: Is it not a fact that the Ministry of Transport have no powers whatever?

SAFEGUARDING OF INDUSTRIES ACT (EMBROIDERY).

Captain BENN: 86.
asked the President of the Board of Trade whether requests have been received for the application of Part II of the Safeguarding of Industries Act to embroidery; and, if so, whether he is proposing to appoint Committees?

Sir P. LLOYD-GREAME: My right hon. Friend has previously pointed out that he does not think it desirable to give information regarding the nature or scope of any particular complaint received by the Board of Trade unless it is referred to a Committee.

Captain BENN: May we take it that if such an application is received, it is proposed to refer it to a Committee?

Sir P. LLOYD-GREAME: It would he unwise for the hon. and gallant Gentleman to make any inference other than can be properly drawn.

Captain BENN: May we find ourselves in this position, that when we re-assemble the inquiry will have taken place and an Order made without the consent of the House?

Sir P. LLOYD-GREAME: The hon. and gallant Gentleman may be assured that he will find himself in no position which is not strictly in accordance with the Statute.

ANGLO-SPANISH COMMERCIAL TREATY.

Sir A. SHIRLEY BENN: (by Private Notice) asked the President of the Board of Trade if he is now in a position to make a statement in regard to negotiations for a commercial treaty between this country and Spain?

The PRESIDENT of the BOARD of TRADE (Mr. Stanley Baldwin): The text of a Commercial Treaty between Spain and this country was initialled on 27th July, and instructions have been sent to His Majesty's Ambassador at Madrid to arrange for its signature with as little delay as possible. It is hoped that an understanding may be come to for bringing its provisions into force immediately on its signature without awaiting formal ratification.
By virtue of this Treaty, practically all goods of United Kingdom origin sent to Spain will be entitled to the advantage of any reductions from the rates in the second or lower column of the Spanish Customs Tariff which may be accorded by Spain to the goods of any other country, the goods to which this treatment is to be immediately applied being set out in a schedule to the Treaty. A further provision is included in the Treaty that, should any such reductions be accorded to goods not included in the schedule, the Spanish Government will extend the benefit to similar British goods on receiving an intimation that any United Kingdom interest is affected. In
fact, therefore, if not in form, all products and manufactures of the United Kingdom will receive full most-favoured-nation treatment.
Over and above this, which is perhaps the matter of the greatest importance, reductions of duty of varying degrees will be accorded in the case of a substantial number of tariff headings in which British trade is interested. In all, reductions are accorded in the case of about 100 headings in the tariff not covered by any existing Spanish Treaty, whilst, of course, we shall also enjoy all the benefits accorded by the Treaties recently entered into by Spain with France and Switzerland. The Treaty also secures the continuance in force of the important provision that British tinplate shall be admitted free of duty if used for packing produce for exportation from Spain.
Full details of the various provisions embodied in the Treaty will be published in the "Board of Trade Journal" when the Treaty is signed.
In return for these advantages we have given an undertaking to admit free of duty Spanish oranges, grapes. walnuts, hazel nuts, almonds, onions, olive oil, preserved vegetables, corks and cork discs and iron ore, and to impose no restriction on the importation of these articles from Spain. We have also undertaken that the existing duties on Spanish wine and wine lees, raisins and brandy shall not he increased for at least three years, nor thereafter, without six months' notice, which is the period for which the Treaty is concluded.
Apart front the Customs Clauses, the Treaty contains the usual provisions which are found in Commercial Treaties, including national treatment for our shipping.
In view of the recent changes in Spanish legislation affecting the taxation of foreign companies, the question of the treatment of British companies in Spain and Spanish companies in the United Kingdom is to form the subject of a further special agreement.
I should add that whilst the Treaty only affects directly the relation between Spain and the United Kingdom, it. contains provisions enabling any other portions of His Majesty's Dominions or Protectorate to adhere to it if they desire.

Mr. KILEY: Will the signing of the Treaty prevent the putting into operation of Part II of the Safeguarding of Industries Act?

Mr. BALDWIN: The subject was not mentioned on either side.

Mr. KILEY: Will not the signing of the Treaty prevent the operation of Part II of the Act affecting any goods from Spain?

Mr. BALDWIN: Something else will prevent that and that is the state of the Spanish currency.

Mr. SUTTON: Can the right hon. Gentleman get Spanish juice included in the list?

BILLS PRESENTED.

ILLEGITIMACY BILL,

"to extend and amend enactments relating to bastardy and to affiliation and certain other orders: and to provide for the legitimation of illegitimate persons by the marriage of their parents; and to amend the Law relating to the rate of Legacy Duty and Succession Duty in the case of illegitimate persons; and otherwise to make further provision with respect to illegitimacy and illegitimate persons and their parents and with respect to certain maternity cases; and for purposes connected with the matters aforesaid," presented by Mr. WIGNALL; supported by Mr. Kennedy, Mr. Walter Smith, Mr. George Edwards, and Mr. Irving; to be read a Second time upon Tuesday, 14th November, and to be printed. [Bill 228.]

LIQUOR (POPULAR CONTROL) BILL,

"to amend the Law relating to the manufacture, sale, and supply of intoxicating liquor, and to provide for the popular control thereof and of the grant and renewal of licences; and for other purposes incidental thereto," presented by Viscountess ASTOR; supported by Mr. James Henry Thomas, Mr. Trevelyan Thomson, and Mrs. Wintringham; to be read a Second time upon Tuesday, 14th November, and to he printed. [Bill 229]

MESSAGE FROM THE LORDS.

That they have agreed to—

Glasgow and Rutherglen Corporation Order Confirmation Bill,

Shoreditch and other Metropolitan Borough Councils (Superannuation) Bill,

Lambeth Borough Council (Superannuation) Bill, without Amendment.

Amendments to—

Allotments (Scotland) Bill [Lords],

Milk and Dairies (Amendment) Bill [Lords],

Solicitors Bill [Lords]

Lunacy Bill [Lords], without Amendment.

Allotments Bill [Lords],

That they have agreed to the Amendment made by this house in lieu of one of the Amendments disagreed to by the Lords.

Orders of the Day — CONSOLIDATED FUND (APPROPRIATION) BILL.

Considered in Committee, and Reported, without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."

WAR DEBTS AND REPARATION.

The CHANCELLOR of the EXCHEQUER (Sir Robert Horne): Before the discussion takes place on the question of reparation, which it is intended to raise, it has been thought appropriate that I should give seine account of the position at the present time in relation to this subject. It is an intricate and complex question, and I am afraid that those whose duty it is to keep in touch with the various complexities are not always quite familiar with the position. Accordingly, I hope the House will forgive me if I venture to think that the present is not an inconvenient time to give a resumé, of the history of this matter. It is a question of infinite complexity, and I do not propose to go into detail, but I think it would be well that I should inform the House of some of the salient features of the history of the matter. It has often been erroneously stated that the Treaty of Versailles finally fixed the amount of reparation that has to be paid by Germany. That is an error. No final fixation was made by the Treaty. On the other hand, the Reparation Commission was set up, whose duty it was to fix first, the total liability of Germany, and thereafter, from time to time, as circumstances changed, the amount which it was then obvious that Germany could pay.
In the year 1921, the Reparation Commission fixed as the total liability the amount at 132 milliards of gold marks, which, converted into pounds sterling, represented £6,600,000,000. That sum was exclusive of the cost to be attributed to Armies of Occupation. It was to be expressed in three series of Bonds, and in payment of interest and sinking fund on these bonds, Germany is pledged in each year to pay a sum of £100,000,000 sterling, together with an amount which
was assessed at 26 per cent. of the value of the exports of Germany. This figure of 26 per cent., it was agreed, might be exacted by any of the individual powers by putting an import duty on goods coming from Germany, and by that means collecting the amount for itself which was due under this head of reparation. Of course, that sum had to be credited to Germany in respect of the payment so exacted from her.
4.0 P.M.
Perhaps the House would like to know that, under the import duties imposed by the German Reparation (Recovery) Act, Great Britain has, since the inception of the Act, collected a sum just on £6,000,000 sterling, so that the Act has been entirely justified. I ought to say that the provision that £100,000,000 sterling should be paid every year included the condition that it should be paid by quarterly instalments, but there was a provisional arrangement that two instalments should be paid together for the year 1921. Germany discharged her obligation last year; in respect of her two instalments, she paid £50,000,000 sterling. She also paid the amount which was represented by the figure of 26 per cent. upon the exports from Germany. But towards the end of the year conditions in Germany became very embarrassed. The mark dropped, I think, from the figure of 250 to the pound sterling at the beginning of the year to a figure of over 800 to the pound sterling at the end of the year. It was obvious that Germany was going to have great difficulties in meeting her obligations in the succeeding year, and, accordingly, a meeting was held in London between M. Briand, the then Prime Minister of France, and my right hon. Friend the Prime Minister, by which arrangements were arrived at for a recommendation to the various Allies as to a modification of the amount of reparation which Germany was to pay in the year 1922. These recommendations were put before a Conference of the Allies which took place at Cannes at the beginning of this year. In the course of that Conference, we were on the eve of arriving at a settled conclusion when, as the House will remember the Government then in power in France came to an end, and M. Briand ceased to hold office.
A modus vivendi was arranged by the Reparation Commission which had been
assembled at Cannes, and on 21st March of the present year, after a meeting between the Allied Finance Ministers in Paris, the Reparation Commission imposed upon Germany a modified obligation in respect of reparation during this year. That modified arrangement was that Germany should pay, instead of the £100,000,000 plus 26 per cent. of the value of exports, which had been the original stipulation, £36,000,000 sterling in cash, and the equivalent of £72,500,000 sterling in kind. That was regarded by Germany as a measure of relief, although perhaps not all the relief which they desired. Nevertheless, it was thought that it was within their competence. The Reparation Commission, however, attached conditions to this modified obligation. They took account of the fact that Germany was not raising enough by taxation to meet her expenditure, and they informed Germany that it would be her duty to impose new taxes, and also that she should increase the burden of the existing taxation. They also took account of the fact that Germany's expenditure should be revised. There was obviously much need for that course being followed for this reason. While Germany, as a State, was unable to meet her obligations, she was, in fact, granting large subsidies to her own population, which had the obvious effect of making her industrialists wealthy while it depleted the resources of the State.

Lieut.-Commander KENWORTHY: No.

Sir R. HORNE: The hon. and gallant Gentleman can take exception to this statement in his speech if he thinks it wise, but I thought the fact was known to everybody who has studied the condition of Germany. That, of course, created great disquietude among those who were endeavouring to maintain a moderate position for Germany as against those who wished to exact more from her than she was in a position to pay.

Sir DONALD MACLEAN: Could the right hon. Gentleman say what were the subsidies?

Sir R. HORNE: She was subsidising bread, and, as my right hon. Friend will realise, the effect of that subsidy was to enable industrialists to obtain labour at a cheaper rate. They were also operating their railways at a very considerable deficiency. The result of that was that
goods could be carried lower than at a proper freight. They were also receiving from their Post Office much less revenue than it cost to operate. The attention of the German Government was directed to these facts, and they were asked to get rid of that form of subsidy and to make the Departments which the State thus operated revenue-producing services, or at least to conduct them that they would not produce a loss. Then the German Government were asked to suggest a scheme for preventing the flight of capital from Germany. That is also a subject which I am sure is well known to Members of this House, because, undoubtedly, it was a fact, as one would have expected, that capital which felt itself insecure in Germany was taking flight to other countries. It was easier to ask for a scheme in a matter of that kind than it was to provide one. Then the Reparation Commission suggested that the Reichs Bank should be free of the control of the Government. That also was important, because, of course, if you have a bank that is absolutely subservient to the Government, it is obvious that the manipulation of paper currency becomes easier than if you have a bank in a position of autonomy. The other recommendations were these: that financial statistics should be published upon the same basis as before the War, and that all information with regard to the revenue and expenditure of Germany should be open to the Committee of Guarantees which had been set up under the London Agreement in order to supervise, to such extent as was possible, the arrangements with Germany to meet its obligations.
Payments were made by Germany under these arrangements. Up till 15th June all instalments were paid. Then, at the end of June, as the House will remember, there occurred the deplorable murder of Dr. Rathenau, and there followed a distinct depreciation in the mark as a consequence of the unsettlement which was caused by this indication of trouble in Germany. On 12th July, the German Government asked the Reparation Commission for a moratorium on their payments. They said they were unable to meet the next payment which was due on 15th July, and they proposed that the moratorium should be granted to Germany on all payments down to the end of the year 1924. The Reparation Commission
replied to that request that the difficulties in Germany were caused, not merely by the necessity of making payments in the shape of reparation, but by causes for which the German Government were themselves, to some extent, responsible. They accordingly asked that the payment due on 15th July should be made, and they said that they would give a definite reply to the general question prior to 15th August, when the next payment became due. In the meantime the Committee of Guarantees were to be engaged in an investigation in Berlin of the position of Germany, and they would have the report of that Committee before the general reply was given prior to the payment of 15th August. We are now, as the House knows, close up to the date, 15th August. The Committee of Guarantees has been at work in Berlin, and they have gone back to Paris where their report is being discussed. But it has not yet been finally presented to the Reparation Commission, and, accordingly, I am not in a position to inform the House of their precise conclusion. But I am able to say this much with, I think, pretty accurate information. The new taxes which it was suggested should be imposed in Germany have been imposed. The old taxes which it was thought could be increased have not been increased, because it was not supposed to be feasible, but, in lieu thereof, Germany has issued a compulsory loan to the amount of 70 milliard marks.

Major Sir GEORGE HAMILTON: What are they worth?

Sir R. HORNE: They are worth rather less than £20,000,000. At the time that the loan was projected I suppose it was worth something more nearly like £50,000,000. That variation in value shows the great difficulty which Germany has in combating the trouble in which she finds herself.

Lord ROBERT CECIL: What about the subsidies?

Sir R. HORNE: The subsidies have been abolished. With regard to the suggestion of an arrangement for preventing the flight of capital, the proposal which has been made and which, I think, is to be carried into effect, is that the Finance Ministry is to issue a licence to all people who desire to buy foreign exchange, but exemption may be given to firms who
require facilities in foreign countries for obtaining the raw material for their business. These are general exemptions, but the Ministry of Finance reserves the right to obtain a scrutiny of the books if any firms who have such an exemption. They can make investigation at any time, they like and consider whether the amount which the firm is buying in the shape of foreign exchange is justified by the amount of business which they are conducting, and a severe penalty may be imposed where it is found that any person is abusing the right of exemption which is obtained. Frankly, although, as I understand, this arrangement satisfies those who are most anxious to have some such arrangement, in my view the only real and ultimately effective method of preventing the flight of capital from Germany is to make the people who hold capital have sufficient confidence in Germany to keep it there.
With regard to the Riechsbank, a law has been passed by which the Directors of the Bank have now the complete control of its operations, and the appointment of the directors will be under the control of the shareholders. The statistics which are required are promised to be provided, and, so far as the supervision of revenue and expenditure is concerned, I understand that it is agreed by the German Government that a member of the Commitee of Guarantees shall have full access to all documents and eaters in connection with revenue, and that another member shall have access to all documents and papers connected with expenditure, and that it shall be open to the members of the Committee of Guarantees to report to the Reparation Commission upon any matters to which they think attention should be drawn, either as to remissness in the collection of taxation or extravagance in the matter of expenditure. Accordingly, as I understand, though I am only speaking now from inadequate information, in the absence of reports from the Committee of Guarantees, for the most part the German Government has met the requirements which the Reparation Commission imposed on it. That is, I understand, the situation to-day.
To complete the story of this matter, I ought to make some reference to the Committee of Bankers which, as the House knows, assembled in Paris in the present year. At the instigation of the British Delegate on the Reparation Commission,
they were assembled for the purpose of reporting what were the conditions upon which a loan could be obtained by Germany in the markets of the world. The House will readily understand that, in the condition in which Germany was and is, a loan seemed the only feasible method by which she would be enabled to discharge the immediate obligations in payment of the reparations which she owes to the Allies. This Committee of Bankers met on the 1st June. They inquired whether the set amounts in the Schedule of Payments were unalterable. That was, of course, directed to the essential question as to whether the amount, £6,600,000,000 sterling, set out in the Schedule of Payments, was to be regarded as the minimum of Germany's obligation to the Allies.
The answer given by the Reparation Commission—by a majority—was that they were not precluded from examining any conditions which would affect such a loan. But the French representative on this Commission dissented from this finding. He was alone, as I understand. In the result on the 10th June the Committee reported that they could not usefully continue to work. They said that the prospect of a loan would depend upon a favourable atmosphere, and that the conditions in which they were asked to perform their duty did not satisfy the necessity of the case. They pointed out in their Report that nothing could be clone with regard to a loan unless German credit was generally re-established, and they said that that would require some more or less permanent settlement of the reparations problem. They expressed the conviction that it was desirable to have such a definite settlement of reparations payments, and they indicated their willingness to meet again if France would adhere to the decision of the majority. The French representative on the Bankers Committee signed a Minority Report, refusing to contemplate new limitations on the amount of German liability, and, accordingly, the matter ended at that point.

Lieut.-Commander KENWORTHY: What were the countries represented?

Sir R. HORNE: I understand that the hon. and gallant Member refers to the Bankers Committee. The countries represented were England, Belgium,
Italy, America and France, with a German representative and a neutral banker. The House will want to know what Germany has actually paid since the Armistice. I hope that I am making the history of this matter clear. There has been paid in cash to the Reparations Commission £77,000,000 sterling, and locally there has been paid in paper marks to the Armies of Occupation a sum which is the equivalent of £30,000,000 sterling, making in all in cash £107,000,000 sterling. There have been certain further payments in supplies to the Armies, the value of which I do not find it possible to compute. To these there have to be added the following items. Value of ships, coal, and payments in kind, £160,000,000. Value of Government properties in ceded territories, for example, in Poland, Danzig and Czecho-Slovakia, £125,000,000 Of course, these properties have all gone to the countries in which they are situated. The Saar Mines, which France obtained, and some minor items are estimated to be of the value, approximately, of £23,000,000 sterling. In all, the figures which I have given represent £415,000,000 sterling. I am excluding now what you would call State territories, which have transferred their allegiance from one Government to another. I am only taking the properties in the ceded territories which are definite Government properties, and have been transferred to the Government in which they are now.
Of this sum of £415,000,000 sterling, Britain has obtained £56,000,000 sterling. Practically the whole of that has been spent on the Armies of Occupation. That seems a large sum, but I would like the House to know that the great bulk of that expenditure was in the earlier period, between the Armistice and the time when peace was signed, when large armies were maintained by all the nations, and that to-day the cost of the British Army of Occupation is not more than £2,000,000 in the year. In fact, I should think that it would work out at less, and the cost of all the Armies of Occupation together is fixed not to exceed £11,000,000 sterling in the year.
In addition to these sums, there has been another matter which has attained some prominence in the last ten days. I daresay that the House appreciates that
there is an arrangement by which individual creditors in Great Britain and France obtained payment through the German Government of debts due to them by individual debtors in Germany. These sums pass through a clearing house both in England and in Germany, and this matter has this importance that, though it is not one of the items in reparations, yet since this money has got to be found, cash has got to be found by the German Government, it affects the capacity of the German Government in finding the currency to perform their other obligations in the shape of reparations.
The amount which they have paid under the clearing-house system in all is, up to the present, £38,000,000 sterling. Of that sum, Britain has received £22,000,000 sterling France £12,000,000 and Belgium £2,500,000. There is still due to the Allies £35,000,000, of which £12,500,000 is due to us. The arrangement for payment involves that Germany should pay £2,000,000 per month towards these purposes, and I feel sure that Members who have read the newspaper Press recently will know that a difficulty has arisen in respect of this matter. The German Government have asked the Allies to allow the sum of £2,000,000 per month to be reduced to £500,000 per month. The French Government several days ago sent a reply which asserted that they were unwilling to assent to any such reduction, and another reply in that sense has been again received from the French Government within the last day or two.

Mr. ASQUITH: That £2,000,000 per month refers to private debts?

Sir R. HORNE: Yes, for which the German Government take the responsibility of finding the money, and, of course, that is a question which will come up for consideration at the meeting which is to take place on Monday between the French Prime Minister and the Prime Minister of England. I see that it is suggested in some organs of the Press that the action of the French Government was a reply to the despatch issued by Lord Balfour two days ago, but anybody who looks at the dates will see how impossible that is. In point of fact, the ultimatum of the French Government was issued several days before Lord Balfour's despatch was known to the world at all.
I am going to venture to deal with a question which is often put to me, and which, perhaps, creates the same puzzle in the minds of many hon. Members as it at first. did in my own, and as it certainly still does in the minds of many other people. The question is often stated thus. How is it that Germany, which is a well disciplined, well organised country, which has all the equipment which it possessed before the War left undamaged and undevastated, which has an industrial people, and which has had practically no unemployment during the last three years—How is it that a country of which these things can be said has been unable to provide snore than the amounts which it has been able to provide towards the payment of reparations?
Sometimes the question is accompanied by a reference to the case of the indemnity which France paid to Germany between the years 1871 and 1873. At that time, between the 1st May, 1871, and late in the year 1873, France, in fact, paid Germany an indemnity of £212,000,000 sterling. It is asked, how was it that France was able to do that in that period of time, and Germany, a country with a much greater population, in some respects better organised industrially, has so far failed to meet that which we expected of her? If I may take up the time of the House for a few minutes, I would like to indicate what, in my belief, are the elements of difference between the cases and where the explanation lies of the puzzle. In the first place, the Franco-Prussian War was a very short war. It lasted so short a time that France's foreign balances remained substantially intact. Her annual income from foreign investments was scarcely touched, and it was considerable. Looking to these considerations, she was able to obtain a loan from other countries. In fact, France raised a loan, or loans, amounting to £71,000,000 sterling. Last, but not at all least among these considerations, she had a large trade balance in her favour, both in 1872 and in 1873.
All the conditions with regard to Germany are just the opposite. The War was a very costly war and lasted a very long time. In the process of it Germany's foreign balances and investments in allied countries were sequestrated and were confiscated by the Peace Treaty, so that she had nothing left in respect of those
capabilities of wealth. Her investments in neutral countries were practically exhausted by purchases of food and raw material in the course of the War, and the liability that she has had for reparation has, of course, made it quite impossible for her to raise a loan, inasmuch as the items which are the security for the reparation would require to be made the security for the loan. So that every condition which favoured France was absent in the case of Germany. But that is not all. Such resources as were left in Germany had to be drawn on heavily after the War for purposes other than reparation. During the War Germany was denuded of practically every class of stock, including food supplies, and that was so completely recognised by the Allies that permission was given her to use a portion of her stock of gold in the purchase of food immediately after the War. In fact, she had to spend £250,000,000 sterling in obtaining What was mostly food supplies and fodder. Fifty million pounds of that £250,000,000 was provided from a store of gold; £10,000,000 was provided from the sale of securities; and—this is the important point—£190,000,000 was obtained by temporary credits and purchase of exchange.
As the House will realise, that involved the sale of enormous quantities of marks. There was a very great speculation in marks, which has resulted in large quantities of marks being held in foreign countries and thrown on the market at any time when there has been something in the nature of a panic in regard to the value of the mark. In addition to that, there has been regularly throughout the period a deficiency of exports over imports; the trade balance has been adverse. The result has been increasing sales of marks and increasing depreciation in the value of the mark. The last circumstance has brought about the process to which I referred earlier. Many people, in fear that the mark was to go very much lower in value, sent what capital they had abroad. There is a certain amount of exaggeration with regard to that particular fact. I do not think there is anything like the amount of German capital abroad that some people suppose and that many people assert. It is necessary for a country like Germany, which is a manufacturing and industrial country, to have large stocks
of foreign currency for the purpose of providing itself with the raw material necessary for carrying on its business, and nobody has any right to refer to that body of foreign currency as being in any sense illegitimate. I think there has been a certain amount of export of German capita] to foreign countries, as one would naturally expect. But my own belief is that the amount is very greatly exaggerated in most of the speeches that one sees on the subject.

Lord R. CECIL: Can the right hon. Gentleman give an estimate?

Sir R. HORNE: I hesitate to give an estimate. My own view—I can give it only for what it is worth, for it is a wild guess—is that, in addition to what is required for trading purposes, the sum which is held abroad by German investors is not more than £100,000,000 sterling. That is the maximum, I think.
I wish the House also to understand that while Germany has been the victim of the circumstances which I have described, she has to a considerable extent been the author of her own misfortunes. During the War she constantly met her expenditure by borrowing and not by taxation. In that respect she was a great contrast to this country. The result was that when the War ceased the system of taxation in Germany was wholly inadequate for the purpose of raising the revenue necessary to meet her expenditure. The Germans made no attempt at all to balance their Budgets. Deficits were met by printing notes, and, as the mark depreciated, salaries and wages increased, and as they increased more notes had to be printed and a corresponding depreciation took place in the mark, with the consequence that you had these two lines of inflation constantly pursuing each other in a vicious circle which Germany has not yet succeeded in breaking out of. That is one of the main reasons why Germany is in a very difficult position to-day.
We from this country for long have strenuously represented to Germany that until she made a change in her procedure no real progress could be made. I have given to the House particulars of the change which she has promised and has, to a certain extent, already put into operation. There is an improvement already as a result of the new measures
taken. It is very slight, but still any improvement is all to the good. During the months from May to December, 1921, tax receipts were sufficient to cover only 63 per cent. of her domestic expenditure, but during the six months from January to June, after some of the reforms suggested had been put into operation, the tax receipts fully covered her domestic expenditure and left a balance over—even though a small one only—towards the expenses which are required by the Peace Treaty. That change is due to some extent to getting rid of the subsidies and to a more rigid enforcement of the Income Tax. I dare say the House will appreciate the great difficulty with which the German Finance Minister is confronted in raising the requisite taxation when the medium in which he works varies with such extraordinary rapidity from one day to another.
In the result, I venture the opinion that Germany can pay very considerable sums in the shape of reparation. I have come to that deliberate conclusion after examination of all the circumstances. But I am equally clear that she requires some respite.

Lieut.-Commander KENWORTHY: Right at last!

Sir R. HORNE: I do not know why the hon. and gallant Gentleman should say that. I think the action taken last year and at the beginning of the present year shows that we thought it necessary that. Germany should have some respite in the present year. Nobody wishes that Germany should be derelict through too strenuous action on the part of the Allies. On the other hand, everybody must wish that Germany shall not escape the results of her own wrong, and I have no doubt at all that in Germany itself there would be a desire to pay that which is reasonable and proper, according to her capacity. That, at least, ought to be exacted from her. I do not go further into that matter at present, and I hope that the House will not expect me to do so. As the French Prime Minister is to be here next week, it is obvious that anything said now as to the line which will be taken by the British Government might very easily have an injurious effect upon the negotiations. I gather from the Press that the French Prime Minister has
already indicated that he is coming here with certain proposals to make to us, and, of course, these will be fully considered with him and negotiations will take place upon them. I am sure that the House will desire that the British Government should be free to deal with any proposals which the French Prime Minister has to make without any entanglement from remarks or opinions that might be publicly expressed at the present time—expressions, perhaps, without sufficient knowledge of the merits of that which he is to suggest.
I turn, for a moment, to a subject which is connected with reparation, namely, the topic of inter-Allied indebtedness. Everybody in the House is familiar with the text of the dispatch which has been issued by Lord Balfour to the Allied nations. The statement of the case which is there presented is so clear that no comment or addition can possibly be required from me. The phraseology in which the views of His Majesty's Government are expressed is so felicitous that I might only weaken or even distort the argument by any clumsy efforts of my own to re-state the case of His Majesty's Government. Nevertheless, there are one or two matters which, before I sit, down, I would like to emphasise. In the first place, I wish to make it clear beyond all possibility of misapprehension that we realise and recognise to the full our obligation to pay our debt to the United States of America. We do not mean in any shape or form to evade that obligation, and we are sending a delegation to America this autumn for the express purpose of discussing the arrangements to be made for the funding of our debt. In fact, the whole foundation of the Note, which has been issued by the Acting Foreign Secretary, is that our debt to the United States of America must be paid.
While this is so, we have never been blind in this country to the colossal burden which is imposed upon the nations of the world, at the present time, because of the indebtedness of one nation to another, and we hold very strongly the view, that no greater impediment exists to-day to the recovery of the world from the disastrous consequences of the War than that burden of debt. The real significance of what I have said is not in any way weakened by the comment that, while we undoubtedly are in a position to pay
our creditors, we might not be able to colleen our debts from our debtors. The true aspect of the position is that in addition to the £850,000,000 which we borrowed from the United States of America for the benefit of our Allies, £2.000,000,000 of our war debts of £7,700,000,000 sterling, represents money not spent by us or on our own behalf, but lent in the course of the War by us to our Allies. In any proposal which we might have been inclined to make, we would still for all time be enduring the burden of that large portion of our debt while, at the same time, our agreement or willingness to forego what Germany owes us by way of reparation, would obviously make it much more easy for our Allies to obtain from Germany reasonable payment for that which they have suffered in the course of the War.
We hold the view very strongly that to get rid of these indebtednesses as between the nations would be the first thing to bring about a revival in the world, to give a new impetus to the reconstruction of the world, and a new stimulus to enterprise. In my view, history will not put any inglorious estimate, either upon the stupendous sacrifices which Britain made during the War, nor on the great concessions which she has been willing to make since the peace, for the purpose of the reconstruction of the world. But we cannot be expected in this matter to stand alone. We cannot forget the condition of our own people, the hardships they are suffering at the present time, the distress and the agonies they are enduring, and the great financial burdens which they, nevertheless, have got to bear. As the result, already, of our sacrifices in the War, we have a burden of debt, which is, I think, greater than that of any other nation of the world. I do not want to make any comparison which might be regarded as invidious, but I think, in the particular circumstances at the present time, I might be allowed to make a comparison between our condition and that of the citizens of the United States of America, and of France. Our debt of £7,766,000,000 sterling compares with a debt of £5,147,000,000 sterling in the United States of America, and one of £6,340,000,000 sterling in France—a sum which includes her debt both to the United States of America and to us.
While our debt is £181 per head of the population, that of the French citizen is £162, and of the American citizen £47.

Mr. ASQUITH: How much does France owe directly to the United States?

Sir R. HORNE: Speaking from memory, I think it is between £500,000,000 and £600,000,000 sterling. In addition to the question of the weight of debt, we tax ourselves more heavily than either of these great nations. The British nation is taxed at 17 guineas per head as against £9 per head in France. Both in direct and indirect taxation the British citizen pays more than the French. Income Tax raises £7 10s. per head here as against £1 per head in France, and the taxation on wines, spirits and beer hers is £3 12s per head as against £1 per head in France. Similarly, if a comparison is suggested with America, and every allowance is made for State imposts in that country, taxation is twice as heavy here as in the United States. Indeed I think it is more than twice, but it is at least twice as much. It is always very difficult, as the right hon. Gentleman the Member for Paisley will remember, to get at the exact amount of taxation levied by the individual States in America. It is not easy to arrive at an exact computation making every allowance, but I would say that the taxation in America is not more than half what it is here. I say in those circumstances it is impossible to ask the British taxpayer alone to shoulder the burden of payment of war debts. Whatever our wishes in other circumstances might have been, we have got to face the facts and adjust ourselves to the realities We must turn our backs upon things which perhaps all the world was waiting for, reflecting that if it had been possible that the nations who fought in the War side by side shared the same privations, faced the same trials, endured the same agonies and the same losses—if only they had been willing to regard their subscriptions to the common success as tributes to the cause for which they fought in unison we might have been able to rid the world of many occasions of irritation and plant in the heart of humanity a new and inspiring hope.

Mr. ASQUITH: I am sure I am expressing the universal opinion of the House when I say we are very much indebted to the right hon. Gentleman for the lucid
and able exposition of a very complicated situation which he has given. It is most desirable, not only that this country, but that Europe and America, should know the real facts in regard to this matter. The figures which the right hon. Gentleman has quoted, and which I am sure have been thoroughly well sifted before he quoted them, in regard to—I will not say relative sacrifices, for that is not the question at all—but in regard to the actual contribution which this country has made, in a voluntarily imposed burden of taxation to meet the cost and sacrifices of the War should be well known everywhere. It is not, as one of our poets has said, an adjustment of
nicely calculated less or more.
Everybody did what they could. We are making no reflection upon any of our Allies or associates, nor are we indulging, I hope, in undue self-complacency ourselves, when we realise, as the right hon. Gentleman has enabled us to do, that nowhere in the world did a country impose such a heavy burden of actual current taxation upon itself. Before coming to the figures which the Chancellor of the Exchequer gave us, figures of great value and instruction, I want, for a few moments, to bring the attention of the House to the actual situation in which we stand. We are in the midst of another reparation crisis—the latest of a long series and I think, in some of its aspects, the most formidable. We are obviously coming to the end of temporary makeshifts, and all dilatory methods must now be abandoned, because the longer the real settlement is delayed—and by a real settlement I mean a final settlement—the worse the position becomes, and incidentally the less the Allies who have suffered from the War are likely to receive. It is no exaggeration to say that the fortunes and the future of French and German finance, international trade and European peace, are all involved. The Government have taken the somewhat unusual step of issuing, as they did yesterday, a circular note of the Foreign Office. I say it quite frankly, that I confess I entertain grave misgiving whether its issue at this moment is politic or opportune. I earnestly hope—and I am speaking with perfect sincerity—that those misgivings may be falsified by events. At any rate
I think it is our duty to-day—I shall certainly regard it as my duty—not to indulge in any criticism of the terms of that note in a polemical spirit. That will be done in due time. I am sure, by some of those to whom it was addressed,. The Government, of course, have, and must have, undivided responsibility for it, and I think it is not inopportune to make what contribution one can, with a sincere desire not further to embarrass an extremely grave situation. There is one paragraph in the Note to which I give the most hearty assent, and those are its concluding words, where the Acting Foreign Secretary says for the Government:
So deeply are they convinced of the economic injury inflicted on the world by the existing state of things that this country would he prepared (subject to the just claims of other parts of the Empire) to abandon all further right to German reparation and all claims to repayment Allies by provided that this renunciation formed part of a general plan by which this great problem could be dealt with as a whole and find a satisfactory solution.
That, I think, is an excellent sentiment, admirably expressed. Now I want, in the first place, to point out to the House what I think is a very important and, indeed, governing consideration in these matters, namely, the necessity of distinguishing between facts and words, and above all between figures and reality. That caution applies alike to the Allied claims on Germany for reparation, which are, of course, only an estimated sum, and the nominal indebtedness of the Allies, which is an indebtedness for money, or money's worth, actually received. The gross figures, as appears from this Note, of the Allied indebtedness to leaving out Russia—a most formidable item—amount on paper to £1,300,000,000. It is no use pretending that this is more than paper figure. It is as empty of meaning for practical purposes as. I regret to say, to me are the abstruse symbols of the higher mathematics. No mistake could be greater than to base upon those figures, as though they were realities, the assumption that that amount, or any substantial part of it, will, or can, be recovered. That is the first point which we ought to hear in mind.
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The next is that you should look at the actual situation in Europe. I have said,
and said for a very long time, that the two problems of reparations and of Allied indebtedness are inextricable, and it is futile either to consider or to handle the one without the other. Now let me bring that proposition to a practical test by asking the House for a moment to consider the two European countries which, beside ourselves, are the most directly concerned—I mean Germany and France. The right hon. Gentleman has given us a lucid and informative account of the economic and financial situation in Germany. Under the Treaty of Versailles Germany was required to pay before the 1st May, 1921, £1,000,000,000. In point of fact, the right hon. Gentleman's figures correspond very much with those at which I had independently arrived; if you add up all the items in the account, ships, coal, dyes, property, even gold, she paid something slightly over £400,000,000. That was the state of the account at that date. The subsequent schemes of payment, settled first by the Reparation Commission, and afterwards, a year ago, by the London Conference, proved, in fact, unworkable.
The right hon. Gentleman has told us to-night that he agrees with a moratorium. I do not discuss its exact date, but a moratorium of some considerable length is agreed, I think he said, by all the representatives on the Reparation Commission, with the exception of the representative of France—a very important exception, I agree. You cannot obviously go on without such a moratorium. Let me just remind the House of the course of fluctuation in the German exchange during the last three years. At the end of 1918, at the time of the Armistice, the mark was 60; at the time of the London Conference, rather more than a year ago now, it was 245; in November of last year it was 1,000; and to-day it is somewhere between 3,000 and 4,000—in fact, I am not sure that to-day it does not exceed 4,000. That is a very remarkable and, indeed, unexampled fact in the history of financial exchanges. It is quite true, as the right hon. Gentleman has told us, that there have been contributory causes besides the incubus of the reparation claims. What are they? In the first place, there has been the deliberate and reckless inflation of the currency by the multiplication of paper money. In the next place, there has been an excess in
Germany during all those years of imports over exports, which has had a very considerable effect. In the third place, it is undoubtedly true, for various reasons which it is not necessary to go into, that during that time the German nationals, that is to say, capitalists and investors, residing in Germany, have accumulated large credits in foreign countries. Those are all contributory causes, and I do not think we ought to minimise their importance, but the fact remains—and it is proved by the history of the fluctuation of the mark and the steady- deterioration, which has now gone on to unprecedented dimensions during the present year—that unless something is done, and done promptly, to arrest that course, Germany is heading straight for bankruptcy. There is no dispute about it. That has a vital aspect upon one aspect of the double problem of reparations and indebtedness; the adjustment of reparations to what. I may call payable dimensions, really payable dimensions, as regards total, as regards time, and as regards methods. That is the situation in Germany.
Let me now ask the House to look at the other great European country which is most directly concerned in this matter—I mean France. I know I shall not command universal assent in this, but I think in this country we have found, and still are finding, considerable difficulty in doing what we ought to do, in trying to look at, to appreciate, so far as we can to sympathise with, the French point of view. France is in this position—imagine yourself a Frenchman looking round at the situation now—that whilst she suffered more in material damage than any other country in the world, and has expended large sums, indeed enormous sums, not out of taxation, but out of borrowed money, year by year for the restoration of her devastated areas, she has received next to nothing from Germany—certainly nothing more, if it amounts to so much, as the cost of her army of occupation. She has received not a franc which could be applied to the reparation of the damage which she, above all other countries, sustained. Unless she receives speedy relief in some form or other, she is faced—I use moderate language when I say it—with an impossible financial situation. In those circumstances it can be under-
stood why France is anxious for the fulfilment of the letter of the Treaty, and is indisposed to surrender any of the rights, either in the way of claims to reparation payments or the enforcement of guarantees which the Treaty assures her. That is the French point of view. You will never get to the root of this matter unless you try to put yourself, in imagination, in the position of all the countries concerned, including America. This is a problem, as I think a European problem, which we can only settle in conjunction with France, and by some settlement which can be only arrived at—I was very glad to hear that the French Prime Minister is coming here to discuss it with our Prime Minister next week—by mutual understanding, in which all the interests of the two countries, as well as the other countries in Europe, are fully taken into account That is the situation in France.
That has a vital influence on the other side of the two-fold problem, namely, the side of indebtedness. In my judgment, two things are absolutely essential if we are to deal adequately with this situation. What are they? Promptitude and certainty. The claim to reparation, as I have said already, not from any tenderness for Germany, but in our own interest, in the interest of our late Allies, but, above all, in the interest of international trade, should be definitely ascertained, should be scaled down to what is really practical. We should be ready, I think—I am glad to see the Note admits it—to forego our share, and, in regard to indebtedness, to remit what is due to us. That is no new opinion on my part.

The PRIME MINISTER (Mr. Lloyd George): The Note does not say that we are prepared to remit all our claims unless there be all round remission.

Mr. ASQUITH: I go further.

The PRIME MINISTER: Yes, but that is not the Note.

Mr. ASQUITH: I am not quoting the Note now; I am expressing my own views, which are not the views of the Note at all. As I have said, that is no new opinion of mine, because, speaking as far back as February, 1920, two and a-half years ago—a long time in politics—when I was a candidate for Parliament, I said that, for my part, and I should not be at all surprised if the Chancellor of
the Exchequer, now the Lord Privy Seal, agreed with me, if I were Budgeting in the future, I should write them off, and I have always been of that opinion. They are not good debts, not from any want of honour or good faith on the part of those who incurred them, but, without incurring something very nearly approaching national bankruptcy, they are not in a position to redeem their obligation. To remit, in my opinion, is not an act of magnamimity in the least. It is an act of good business. Let me say here—and now I am coming rather near the Note—there are, in my opinion, strong practical reasons against partial and contingent remission. I will tell the House what they are. In the first place, if you have partial and, still more, contingent remission, the European slate is not clean. It still remains with uncertain items, which may come in course of payment at indefinite and, probably, inconvenient tunes. In the next place, partial or contingent remission hangs up indefinitely under a cloud of uncertainty a fresh start in the general European economic life. Further, it interposes enormous and, I think, insuperable difficulties in the way of an international loan. Lastly, which is not the least important, it tends to stiffen the backbone, particularly in France, of those who maintain that if they are left with any part of the burden of these debts upon their shoulders, as they cannot discharge them themselves, they must shift them on to Germany. In other words, they will he harder than ever against any scaling down of the paper indebtedness of Germany. I think it is a thoroughly erroneous policy, when you are dealing with this, not to deal with it whole-heartedly, and, above all, not to deal with it in suchs way that this element of contingency will not hamper the whole future of European economic life.
I said a moment ago that there is another point of view which we ought to try, if we can, to realise, and that is the American. The United States of America know perfectly well—I am not dealing here with paper figures—that we in this country are both ready and able to redeem the whole of our indebtedness to them, and of that there ought to be, and there is, no doubt whatsoever on the other side of the Atlantic. I should very much deprecate any suggestion, direct or indirect, to the United States of America
that they were under any obligation, moral or even sentimental, to abate in any way their just and righteous claim. But let me add this. I should be more than glad to see this question of American indebtedness kept quite apart from the pressing and urgent European situation. We may pay too high a price for strict logic and for abstract justice. It cannot be stated too strongly that this is purely a question of expediency and of policy, and, in the long run, their voice should be allowed to prevail.

Mr. WISE: I wish, as a back bencher, to thank the Chancellor of the Exchequer for his lucid and clear explanation of the European situation. There are two big problems in Germany, and they are interlaced with one another. I refer to (1) the political, and (2) the financial. With regard to the political, I cannot help thinking that to-day the political situation is worse than it was a year ago. The struggle which has started between the central Government in Bk3rlin and the Bavarian Government at Munich, is indeed a sore point. I think that this struggle is caused chiefly by the assassination of Dr. Rathenau, and you have, in the one case, the Berlin Government, which has brought in a new military law to endeavour to fight the assassins, disagreeing with the monarchical reactionaries in Munich. It is a dangerous situation. It has sprung up quite recently, and you cannot get confidence back to the country unless you have the political situation on a firm basis. The whole ethical situation of Germany has altered in the last 150 years. Germany in one sense has imposed on her system both political, moral and social, and the ex-Kaiser has been the head of that system. You should realise the position of Germany eight years ago when Germany was controlled by the ex-Kaiser, and where everybody knew his place, everybody obeyed his superior, and the ex-Kaiser was üfiber alies. We cannot get the financial position corrected, or into any sort of order until we see that the political situation is put on a firm basis. The cost of living which, at the time of the Armistice, was 60 per cent. above the pre-War level, is now 4,500 per cent. above that basis. If you want stability, you have got to give that country some
hope, not necessarily for this generation, but for the generation to come.
I should like to refer to the financial position of Germany—my number 2 point. It is nearly four years since the Armistice, and with the mark at its enormous inflation, you cannot possibly get confidence back to anything near the 1914 basis. A year ago the mark was 280, and in this big inflation of 4,000, which it touched to-day, you have got to realise that that is equal to 20 in 1914. The whole financial policy of Germany is peculiar. You have a country with a depreciated currency, with the factories busy, and practically no unemployment. Certain people in this country think we should go back to a depreciated currency. I am dead against it. It would be the ruin of this country, which has to buy such an immense amount of commodities and raw materials from abroad. Germany is like a great bubble, and the more pressure you bring on to it, the more the bubble increases. But if you bring too much pressure on to it, you will find that that bubble will burst. We had only last week an instance of Germany getting into a worse financial position than she was previously by the rise in her bank rate. It has not been referred to to-day, but it is a very important point, and it is a point which must be realised that that bank rate has not risen since 1914. The flood of Fiat paper money is simply stupendous. In 1914 it was 2 milliard paper marks; at the Armistice, 27 milliard paper marks; and last week 179 milliard paper marks. The only way to deal with these paper marks is to devalue them. I mentioned last week in this House that Russia had started to devalue her rouble, which was 20,000,000 to the £. It has been reduced to 2,000 to the £. That is a start. Germany will have to do it and many other of the European countries as well.
Reference was made by the Chancellor of the Exchequer to the Budget of Germany. Perhaps I might be allowed to refer to the Budget Estimate for the fiscal year ending 31st March, 1923. It is divided into three sections. The first deals with general administration, the second with Government undertakings, and the third with the Peace Treaties. Let me deal with number one first—general administration. That includes the permanent expenses, the revenue, the
taxes and items of that sort. It is often stated that Germany is not taxed. The estimate of taxation for this fiscal year, ending 31st March next, is 109 milliards of marks. If you put that on a gold basis it is £5,000,000,000. What I complain of is, that Germany may tax her people, but she is not collecting the taxes That is one of the important points. Number two of the Estimates is what is called Government undertakings, and this includes what has already been referred to by the Chancellor of the Exchequer—the Postal and Telegraph Services and the railways. In this fiscal year she estimates a loss of 2½ milliards on hot. Post Office and Telegraph Services and 17 milliards of marks on her railways. That should be stopped. With regard to number three, which is what is called the Peace Treaty Budget, there is an estimated loss of 226.5 milliards of marks. You cannot balance your Budget with a depreciated exchange. That is quite impossible. These large amounts which T have given by way of endeavouring to show the deficits are made up through this Fiat paper money, which is dealt with and sold wherever anybody will buy ii. There was a discussion recently of a loan for Germany that would help her and her credit, and I have taken from a German paper, the "Deutsche Allgemeine Zeitung," a letter written by Herr Stinnes, a gentleman probably known by name to many Members of this House. He says:
A loan raised for reparation purposes would merely lead to a temporary change of our creditors. When its proceeds are used up we should have, not only to resume annual payments, but should have to add to them interest on the loan. Germany's gold payments would be increased permanently. It would mean filling a hole by making another.
That is the opinion of one big commercial man. I feel that Germany does not want at the moment so much a loan as she wants credit. The Chancellor of the Exchequer has referred to the imports and, exports of Germany. He did not give any figures. Perhaps the House will bear with me if I just give them the figures for the last six months, which show the absolute impossibility of the financial position in that country. From January till 30th June the imports were 17,000,000 tons and the exports
12,000,000 tons. In value the imports were 142 milliards of marks and the exports were 130 milliards of marks.

Lieut.-Commander KENWORTHY: Gold marks?

Mr. WISE: No, paper marks! And the figures show that the imports were greater in this six months by 12 milliards of marks. If you put that on a gold basis, it means £600,000,000 for the half-year. There is no possible chance of Germany dealing with her financial position unless she devalues and starts almost afresh. The Chancellor of the Exchequer also referred to the migration of securities. He did not go into the details very closely. I cannot help thinking that there is more than £100,000,000 of private money outside Germany. I have in this House shown at various times how Germany has increased her holdings in various companies outside her own country. I think that should be taken in hand at once. Every day that migration of securities becomes more difficult because Germany sees, and sees wittingly, that she will endeavour, so far as she can, to get out of the reparation which is round her neck. We have to remember that Germany, at the London Conference, offered £2,500,000,000. Do not let us forget that. But there is no chance of getting that unless you have the political side in some sort of stability as well as the financial. Delay is dangerous. Delay is also costing money. Delay may mean that the bubble will burst.
I should like to refer to another country which is mixed up with reparation, and that is Austria. Austria has now a black cloud over her. Her quotation of exchange has gone up 250,000 compared with 24 in 1914. That explains the position in a nutshell. Why I mention Austria at the present time is that I feel Austria cannot live under present conditions. You have either to alter her boundary or join her up with another country. Something must be done. She is dying slowly. Look at the increased cost of living. Look at the prices in Austria during the last few months. Flour which was 70 kroner per kilogramme in 1921 has gone up to 800. Margarine which was 96 kroner per kilogramme has gone up to 2,420. People with fixed incomes have disappeared in Austria. But we
have a great man there, Sir William Goode. He has endeavoured, and is still endeavouring, to bring Austria back to some sort of stability.
Let me also mention Poland, because it is all mixed up with reparations. You have to deal with the whole. It is not enough dealing with Germany alone. Poland is in almost as bad a position. Poland's estimated revenue was 38 milliard of Polish marks per month; this is working out at 12 milliard per month. The estimates are all wrong. I do not blame the Ministers, because I really feel that they have not. got men of ability and experience around them. There is another country I should like to mention, Mr. Deputy-Speaker, a country which I think would help our unemployed more than anything else. I refer to Turkey. I do wish we could get to terms with Turkey. You have again there the instability of the piastre, which was 110 in 1914 and is now 720. The imports into Turkey in 1921 were £121,000,000, and the exports in the same year only £30,000,000. That shows the position of the country and the instability of it. I think if we could get peace there it would bring back the trade we used to hold in 1914, when we carried on one-third of the trade with Turkey. If we had peace I feel confident it would help to relieve unemployment in this country.
My last point is the Allied debts. The settlement of Europe hangs on the Allied debts. It is no good considering that. there is much possibility of getting any of them, and I will state why I think so. Roughly, the House has been given the figures of what we owe and what we are owed. But let me put it in another way. Let me give the position of the big countries of Europe with regard to the War debt. The United Kingdom owes about £1,000,000,000. France owes £1,300,000,000—that is, to ourselves and to the United States; Italy, 1800,000,000; Russia, £700,000,000; Belgium, £200,000,000. If you add these together they give a total of £4,000,000,000. Then if you acid the reparations, which is £6,600,000,000, you get a total of £10,600,000,000 on a geld basis. It is quite impossible to think of paying these debts when practically every country has put up its tariffs against the others. Let me try to prove it. The total value of foreign trade of
the world in 1913 was £7,700,000,000. If you double that, owing to increased prices, and call it £14,000,000,000, then it will be seen that it is quite impossible to pay, and not only not to pay the capital, but it is almost impossible to pay the interest.
The Chancellor of the Exchequer has referred to the Franco-German war. I was not going to allude to it, but I think we have to realise that that was not a world-war. We have to realise that we were able to lend France money, and through that she was able to pay her debts quicker than if it had been a world-war. But I should like to refer to what happened 100 years ago almost to this very day. This House was dealing with the Budget of 1822. There was a Member of the House then, a Mr. Grenfell—I do not know whether he is related to the present hon. Member for the City—but in his speech it is said that Mr. Grenfell begged to put a question referring to the Austrian loan from which he was sorry to see no sum carried to the credit of the year. He believed the amount was £17,000.000. Perhaps I may explain to the House that we lent Austria money in that war of 100 years ago. The reply of the Marquis of Londonderry was that
The negotiation was still in progress, but from the state of Austrian finances a moderate compromise only could he expected. It would be too much for him to give any assurance that some arrangement might possibly be made, but. still he was not absolutely without hope in the matter.
Out of that £17,000,000 we eventually received about £2,000,000, and we were glad to get that. We did not receive that until 1825. I feel confident that we can do nothing in a large way without the United States of America, because all these countries want credit, and we have not got all the credit to give them. Look at our debt with the United States. Take the interest. on it, which I agree must be met. It means about 1s. 6d. on the Income Tax, and then you are not allowing for the Sinking Fund. It is a very large amount, and it can only be paid for by the export of goods or in gold. I know that we have securities. I know that the Chancellor of the Exchequer realises that we still have a great number of American securities, and we could pay them in that way, but then you would be interfering with the individuals who have investments in the United States. We cannot
get back to our normal trade until the debts are settled in some systematic or proper way. I suggest that we should get together with the United States. We ought to take a broad and courageous line, and only in that way can we think of getting back to the road to recovery. If we take that line, it will take years even then to get back to stability. We have to look ahead, and if we do that and deal with these problems in a businesslike way we shall get back eventually to stability, and look forward to permanent peace with security.

Colonel WEDGWOOD: The hon. Member who has just sat down always interests the House on financial questions. Although he gave us a very fair commentary on the present position of affairs in Europe, he did not answer the question which I wanted to put to him—what would he do in order to heal the disease of Europe. Does he approve or disapprove of the latest move of the Government, namely, the Balfour Note? That is the new fact which we have to consider to-day, and none of the previous speakers, not even the Chancellor of the Exchequer, has made it clear whether they were for or against the Balfour Note. It seems to me that this Note is the beginning of wisdom. It puts the cards upon the table as they ought to he. It enables us to look the financial difficulties of the world in the face, including America. Even the man in the street will see that it is obvious that we cannot pay our debts unless we are able to recover the debts owing to us. Anything else is Quixoticism and will not result in an actual carrying out of our obligations. We must expect to get something in, if not the whole, but, as the Balfour Note says, sufficient to enable us to square our debt with America. We cannot lightly disregard a permanent Income Tax of 1s. 6d. in the £ in order to feel good when we meet Americans. The arguments that are used, for instance, by the right hon. Gentleman the Member for Paisley (Mr. Asquith), and which I have seen used over and over again in the Press during the last fortnight, in favour of a one-sided cancellation of our debts, and that we should fulfil our obligations regardless of whether our debtors pay their debts to us; the argument that cancellation of debts would put Europe on its legs again seems to me to
be quite unfounded. Beyond having a certain psychological effect it would do nothing to alter the actual position in Europe. If as part of a bargain of any one-sided cancellation of debt the French were to consent to accept a smaller sum in reparation from Germany, then, at any rate, something could be done, but even that itself will not put Europe on its legs again. Besides a reduction in the amount of reparations, besides a fixation if the amount of reparations, we want a different spirit right through Europe at the present time. If we cancelled the debts owing to us by France, Italy, and Belgium, there is nothing to assure us that that reduction of liability will not result in additional expenditure in those countries.
There is nothing to assure us for instance, that there will not be a larger expenditure on aeroplanes, or that the perpetual waste of the armies on the Rhine will not continue to drain the resources of Europe. There is nothing to assure us that the removal of this definite liability of debts will result in the various countries of Europe honestly balancing their Budgets and raising taxation to meet the debt. I think when we are reproached, as we have been during the last month, for a unilateral cancellation of debts, I think we must consider how the taxpayers of the two countries concerned in the transaction are going to be affected by this one-sided cancellation. We are told that. we are in a position to pay our debts, and that the French are not in that. position. What is the acid test of the ability to pay your debts? Surely it is the amount of taxation levied upon the people of a country.
I have taken the trouble to get out the figures of the per head taxation in France and the United Kingdom. From the statistics given before the Brussels Conference in 1920, I see that, reduced to an equivalent rate in dollars calculated on the rate of exchange at that time, France was paying in direct taxation 11 dollars per head of the population, and we were paying 49 dollars, which is more than four times as much as France pays in direct taxation. Turning to indirect taxation, France paid 14 dollars per head when we were paying 28 dollars per head. In other words, the taxpayers of this country, who are assumed, apparently, by the newspaper Press in this country as well in America and France to be able to meet their liabilities, are being taxed
between twice and four times as much as the people in the countries with whom we are asked to have special sympathy, because they are quite unable to meet their liabilities. I think that alone is an argument which leads one to be satisfied that the Balfour Note, at any rate, does not put the case too unblushingly, from a materialistic point of view, so far as England is concerned. We contend in that Note that we are willing to cancel any superfluities of debt, but; I think we are entitled to ask from our debtors those sums winch we ourselves have got to pay over to America.
I have already said that a good deal more has got to be done if Europe, is to be put on its legs than the mere cancellation of debt whether it be a unilateral cancellation or not and a reduction in the amount of reparation. I am inclined to think that the last two months has made the problem of the reinstatement of Europe almost impossible. We have to look at what is going on in Europe. It is no good simply telling us, as one hon. Member has said, that the bubble will burst. The bubble does not burst as long as the various States in Europe can go on making their unfortunate nationals take their paper as good money, and so long as they go on printing more paper money as we see them doing in Germany the currency will continue to depreciate.
There is another point to be considered in this connection and it is whether a country will go bankrupt. Under present conditions not even Russia has gone bankrupt because what these countries do is merely to depreciate the currency and they meet the difficulty in that way. All over Europe the currency has depreciated, and then there has been a progressive movement. There has been, however, no country in Europe which has started depreciation and stopped it except France and Italy. Where the stoppage may be more or less temporary in all those countries if you go back 12 months the exchange was better. It is depreciating everywhere except in England because up to recently we have encouraged sound finance in this country. In all these other countries it is getting worse year after year and where the Austrian exchange is to-day we must expect the German exchange to be this time next year. In those countries the peasants on
the land are quite prosperous even in Austria and they are prosperous where they are not starving even in Russia.
6.0 P.M.
The people who live on the land and produce the necessaries of life are all right, but the people who are suffering are the middle classes, who are ruined because their fixed incomes have become valueless. Take the workers in large industries which depend upon civilisation for their continuance. The industrial workers of Moscow and Petrograd have to go to the wall, and so have the industrial workers of Vienna. In spite of the exchange, industry becomes impossible when the exchange collapses in this way. When this condition of thing arises in Germany there is going to be trouble far worse than in Russia or Austria, because Germany cannot survive on its agriculture. Germany depends upon her industries, and when they cease there is going to be a disaster such as we have not seen in the four years of peace which we have experienced. One thing that is not always noticed, and which is really making things worse and worse in all these countries is that everybody up to now who has lent money in those countries has lost it. They lent their money when money was good in those countries, and they have been paid back when money was worth one-hundreth part of what it was worth when they lent it. Everybody who has lent money under those circumstances has lost it, and nobody will lend money today in Austria, Germany or Russia. It is fatal to lending when you feel that you will only get back one-hundredth part of what you lend, and the consequence is that the money demanded for accommodation is enormous. That alone does a very great deal to prevent the possibility of any industrial reconstruction in these dying countries. This is the abyss into which Europe is being driven, all Europe including France. It is of no use pretending that France is in a different position to Russia, Germany, Italy and Austria. As soon as the French realise that they are not likely to get these millions of reparation from Germany, as soon as that idea gets home, the French rente is likely to collapse, just as the other currencies have done, not so badly perhaps, because France is more of an agricultural country than Germany. Undoubtedly France cannot escape the cataclysm which is coming to Europe. In
trying to save Europe, we are trying to save France; in trying to persuade France to save Europe, we are trying to persuade France to save herself. What is the position that is destroying Europe to-day? It is not only the financial uncertainty but it is the enormous expenditure on armaments and the unbalanced budgets. It is no good remitting debt and reducing reparation if all these little nations, from Poland to Finland or Serbia, are going to waste their money in building up gigantic armaments. You must somehow force them to balance their budgets. The French are talking of controlling the German Budget. I am glad to see that the Americans are giving the French advice as to how they can increase their revenue and meet their debts.
The position that faces the Prime Minister to-day in Europe is not simply a question of the translation of debt. It is not simply a question of the reduction of reparations; it is just as much his duty to cut down the waste of money on armaments throughout Europe, and to deal with the hopeless financial position which inevitably comes from unbalanced. Budgets. All along America has described this state of things, which we are only just beginning to realise in England, as a dog fight. They have said they will will not take any part in assisting Europe on to its legs as long as the dog fight is allowed to continue. That has been America's line for the last three years, ever since Wilson went under, and they will cut themselves adrift from Europe as long as Europe is thus afflicted with insanity. We have taken the other line. We tried Genoa. The Prime Minister went to Genoa believing that he could persuade France and M. Poincare, as he had persuaded M. Briand, that in the interests of France as well as of Europe it was advisable to relinquish a great part of the reparations claim. It is perhaps not going too far to say that the Prime Minister for the last year, by promises in one direction and another, has been attempting to bribe France to be good. Now he has changed his tactics. The Balfour Note is the change. It means we are taking up the same sort of attitude as America has consistently taken up.
Let the House consider what America has done by way of bringing pressure
upon Europe to adopt a sane financial policy. America has not gone on its knees to either England or France or any other country to beg them to drop armaments or to adopt a sane attitude towards finance. Instead of that, they have asked for their debts to be funded; they not only ask that they should be funded, but they ask for interest to be paid upon them. They have asked this of France and Italy and other countries in order that they may realise the whip hand that the creditor has over the debtor. A very strong hold over Europe to-day is the fact that Europe owes America money. Then again, America suddenly shot in a new demand—an unexpected demand for their share of priority in reparation, in order to pay for the American troops in the Occupied Territory. That demand was made, not because. America wanted money, but because they wanted to have another screwdriver with which to drive sanity into the heads of the Allies and of the rest of Europe. In the same way, when the question of loans came up, when the bankers met to decide whether a loan could be given to Germany, the same line was taken by America, and they said that there should be no loan unless there was sanity in finance. Their refusal to take any part in the League of Nations, as at present constituted, is part of the scheme which prevents them helping Europe until Europe shows real signs of being willing to help itself. When we get, as I hope we shall soon, Germany into the League of Nations, when we get Russia in the League of Nations, which I also hope will soon occur, when we get armaments cut down on the Washington scale—not only Naval, but Aerial and Military—when we get Budgets balanced, then I think we shall find that America will take its part, not only in the reconstruction of Europe, but in the governance of Europe which the League of Nations must take up some time or another.
The Washington Conference itself shows the line which America wanted Europe to travel. That Conference was a great success and the Americans are proud of it. But it only touched the fringe of the difficulty. Capital ships were getting out of date in Europe before they were suppressed at Washington. There is still work to he done in the same direction, and I hope that this Balfour
Note is the precursor of Conferences which will consider, not merely debts and reparations, but the stabilisation of Budgets and the suppression of the waste of money on armaments. The difficulty has been that the Americans themselves have had this Note suddenly sprung upon them at a time when they had been told by the most influential paper in the world that Great Britain was going to do something else, and was going to pay her debts and never be paid by anyone. How the "Times" continues to be considered an English paper I cannot understand. When the Balfour Note was read for the first time, the Americans seemed to think that it was directed against them. I should imagine the object of that Note was quite different. I should imagine the abject was to enable the Primo Minister next Monday to deal more satisfactorily with the Gentleman on the other side of the Table. The American criticism has been largely directed towards our supposed desire to appeal to their sympathies. No one likes having their sympathies appealed to, and I imagine the Americans feel over this question of debt just what the man in the street here feels when we are asked to cancel the French debt. I suppose the Note is to be used to show the French, the Italians, and the Belgians that there is no chance of the "Times" scheme being adopted, and that there is no chance of England being squeezed any more. But I think it ought to show America that we are coming round to their point of view, that we are adopting for the first time their attitude, and that we are allying ourselves with them in the problem how to deal with European insanity. I think the more we go on that line the quicker shall we be able to solve the problem. It is obvious that at the present moment, now that this policy has been adopted by the Government, there are snags ahead. We have adopted the policy. I hope we shall stick to it. The French are in the position now of either having to wait till it is really obvious to all men that they cannot possibly get their reparations from a bankrupt Germany, or else, alternatively, of acting on their own, seeking fresh sanctions and making the state of Europe more desperate than it is now. I hope they will take the first policy: It cannot be long before they must see that we and America are right
in our methods of tackling the European problem. Sanity will come some time. I think it will come sooner after this pressure than it otherwise, would do. The French are bound to see sooner or later that their interests are ours as good Europeans.
But suppose they take the other line. Suppose they seize the Ruhr and carry on the occupation of the Rhineland after we and America have withdrawn our troops. What will happen then? Inevitably there must be disaster in Germany. The Republic in Germany will collapse. You will have a Monarchist counter-revolution. You will have in Germany the old Junkerdom enthroned It may be you will have civil war, or it may be they will he fighting the French. But, at any rate, you will have complete destruction of the remnants of civilisation in Europe. What line are we going to take under these circumstances? I hope this is only the beginning. I hope, whichever attitude the French take towards the question of reparations, the two Anglo-Saxon nations will come together and line up on this problem, acting in common, and that there will be no longer any suggestion of American isolation, but that England and America will be joined in their efforts to bring pressure to bear on the rest of Europe to adopt sane finance, to prevent waste on armaments, and, above all, to wipe out the tariff barriers that are obstructing the recovery of civilisation. If we-can work together on those lines, surely there is no power in the rest of Europe that ran stand against us.

Lord EUSTACE PERCY: The functions of this House in a Debate of this kind are somewhat doubtful. The House cannot, with any hope of success, attempt in such a Debate to excogitate lines of policy or try to influence negotiations which in these days are always going on, and in which to a great extent we have to give our representatives a free hand. But I think, perhaps, the' most useful function of a Debate of this nature at a moment like this is that it enables 'us to show the Government of the day that we are prepared to stand for certain things and to take responsibility for certain things. We have listened to a speech from the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) with which I have a good
deal of sympathy. I have always advocated close working together between this country and the United States. I am afraid, however, that no really useful contribution can be made to this problem unless we recognise what are the necessary historical differences between the two countries. One of these is that America is not a signatory of the Treaty of Versailles, and we are. We are a signatory of a Treaty to which France has also affixed her signature, and, under that Treaty, we are bound to France in certain ways, of which reparation is one. I believe it to be necessary to revise that obligation, but, really, the hon. and gallant Member's proposal that, as the first step towards a revision of a written obligation, we should show France that we have the whip hand of her, is not calculated to smoothen out the beginning of the negotiations, nor is it likely to help to success in the end.
I want, if I may, to recall to the mind of the House one feature in the history of this problem. One thing which has largely contributed to the growing chaos on this question, which has driven the whole reparation problem, and the problem of the inter-Allied debts, down from depth to depth, almost to despair, has been the influence of political considerations in the different countries concerned—party political considerations in this country, in America, and in France. At every stage since the Armistice, when there seemed to be a hope of that ideal which the Chancellor of the Exchequer laid down to-day in his peroration—the ideal of a mutual cancellation of onerous obligations between nations who had fought together—every time there seemed to be a chance of the realisation, which is now shown in the Balfour Note, that reparations and inter-Allied debts are part of the same problem, at every such moment political considerations of one kind or another have intervened. Think for a moment of the Peace Conference. Personal reminiscences, especially from individuals who had no great responsibility at that Conference, are, I agree, of very little value, but, for what it is worth, I will say that I believe there was a real chance, in the first two months of that Conference, of really getting a cancellation of Allied debts in connection with the problem of reparations. It was not done. Let us remember what was
the position of the two chief parties to the Peace Conference at that moment. There was the Prime Minister, fresh from the 1918 General Election, with certain pledges as to reparations which he had given; and there was President Wilson, prepared, like the Prime Minister, at that time to consider the whole question of the inter-Allied debts, but being advised by some of his economic advisers—who were also very deeply concerned in the political future of the Democratic party—that he must not give this handle to the Republicans, that the inter-Allied debts would be used in the campaign by the Republicans, and that he must not lay himself open to the danger of losing the next election. That is the kind of thing that has been going on ever since.
I agree with what was said by the right hon. Gentleman the Member for Paisley (Mr. Asquith), who asked that there should be no criticism of America, that we should understand America's point of view. At the same time, however, do not let us be mealy-mouthed about it. Do not let, us try and idealise the American attitude, as I think the hon. and gallant Member for Newcastle-under-Lyme does. The controlling fact in America at the present moment, as regards our debt to America, is that, again in the course of an election campaign, the people of America have been taught to believe that they can afford enormous soldiers' bonus payments, because they will get the money out of England. This is the kind of thing that is going on the whole time, and my fear at the present moment is that the Balfour Note represents another step on the same downward course—that, whatever be its actual purpose in international affairs at this moment, it will he used as an argument to the people of this country that we are standing up for having our debts by France and Italy paid, and that the people of this country will then find inevitably that, whether we cancel the Allied debts or not, whether we have hopes or not of the eventual payment of interest and sinking fund on those debts, we shall for the next three Budgets get practically nothing in the way of interest out of our Allies, while for the next three Budgets we shall also get no real progress in America towards a policy of the cancellation of our debt to America. Therefore, the burden of paying interest and sinking fund on the
American debt must, for the next three years, lie on the people of this country, and the sooner they understand and realise it the better. That is the first thing that I wish to say, and I believe the people of this country would rather be told that, would rather face that fact, than be soothed down by any idea that it would be judicious or to their interest to try and get immediate interest payments out of the Allies. I am quite sure that, there is not a Member of this House who is not prepared to tell his constituents and to tell the country so, and to support the Government in such a policy if need be. Secondly, the Balfour Note warns the world that we hold certain trump cards in our hand.

Coronet WEDGWOOD: Hear, hear!

Lord E. PERCY: Yes, but at the very best, and even taking the hon. and gallant Member's estimate of the situation, they are trump cards which we cannot play for three or four years. For the moment we have no means of pressure on our Allies even if we wished to use it—no means of pressure which it would be judicious or convenient for us to use. We cannot expect to get anything out of them for the next three or four years. There is, however, one trump card which we do hold in connection with our negotiations with France, and it is a trump card to the use of which hon. Gentlemen opposite are, I am afraid, very much opposed, but which I am warmly in favour of using if the Government find it desirable to do so. Our real trump card is the pact of guarantee of the French frontier. Hon. Gentlemen opposite are very much against it. One of their objections is, of course, an objection of principle—that it tends to militarism, to separate alliances instead of to general alliances within the orbit of the League of Nations. I understand that objection, and I appreciate it. My answer to it is that, if you believe, as the Noble Lord the Member for Hitchin (Lord B. Cecil) believes, and I agree with him, that disarmament, and with it the balancing of the Budgets, cannot really be expected except as part of a general arrangement by which joint guarantees shall be given as to the frontiers and the integrity of the contracting parties—if you believe that, and if you think, as we must, that from the point of view of France and Italy, and from the point of view of this economic problem of Europe,
the necessity for disarmament is urgent and cannot wait for the gradual negotiation of such wide and sweeping guarantees, then you must believe that a guarantee to France alone is a necessity, as a first step if you like, towards that broader system.
While, however, that is one objection of substance, there is another objection in the minds of hon. Gentlemen opposite—the old objection which I mentioned at the beginning of my remarks, the objection that it is unpopular. Of course it is unpopular. Of course it is very easy to misrepresent it on the platform. It is very easy to be told that you are pledging the people of this country to more blood and agony in the trenches of France in the future. There is nothing more easy than to show its unpopularity, but, in spite of that, I believe that there are many Members of this House who are fully prepared to support the Government in such a guarantee to France as part of a general arrangement for the settlement of the economic situation in Europe—that we are prepared to accept that unpopularity, that we have no fear of facing it, because we know that while, no doubt, we are asking the people of this country under any such arrangement for great sacrifices, we are offering them in exchange the leadership of Europe, the respect of America, and the homage of the world. I feel sure that there are many Members of this House who believe in such a clear-cut policy as that, who will support any Government which comes forward with such a policy, and will support no other Government.

Mr. THOMAS SHAW: Like every other Member who listened to the Chancellor of the Exchequer, I should like to pay my humble meed of thanks to him for the extremely lucid speech that he made. I think that no one in the House, whatever his politics may be, could take exception either to the method or to the spirit that animated that speech. So far as the spirit was displayed, the spirit was excellent, but I am afraid that the cautiousness of the right. hon. Gentleman's race prevented him from saying many things that he might have said with advantage. After all, we have a right to speak very frankly both to the French and to the Americans. We were engaged with them in a great struggle; we sacrificed as they did; and we did, I think,
save France from losing, if not her independence, at any rate a considerable degree of that independence. If we feel that it is a necessity to speak quite frankly to an Ally, I think we have that right, provided that the frankness of our speech is animated by a real friendliness towards the nation to whom we speak, and towards Europe as a whole. We must try, as the Chancellor of the Exchequer asked us to do, to visualise the psychology of the French. Anyone who has travelled extensively in France, and has spoken with French people of all types, knows that, rightly or wrongly, there is in the French mind a fear that Germany will attack France again. Whether one believes that to be a possibility or not—and I do not believe it to be a possibility—one must take account of the fact that French people, generally speaking, do believe it to be a possibility, and must, accordingly, judge French policy and French tactics from the point of view of the state of mind of the French people.
But while one tries to recognise the psychology of the French, while one tries to put oneself so far as is possible in the position of the Frenchman, there are other things that one ought to say to the French. In my opinion, France will never get her reparation so long as her policy remains the policy of to-day. There has been a great deal of sword rattling in France. There was the speech at Bar-le-Duc, and it was stated in France, and I believe it is true to state it, that immediately after the speech instructions were given to armament and aeroplane works to prepare to work day and night. It is a fact that the latest Note from France talks about putting certain measures into force. These things are facts and we might as well recognise them. What France expects to gain in the shape of reparations by these methods I do not know, but what we and the Allies of France are likely to gain by them I feel I do know. I feel that we are likely to gain more unemployment, that. Europe is likely to suffer more than she is now suffering and that the general condition on the Continent is likely to become much worse.
Surely the condition of affairs in Europe is serious enough to cause all of us to think very seriously as to whether
the methods pursued up to now have been the right methods or not. How can Europe settle down in a state of uncertainty? How can anyone settle now what Germany is really expected to pay, how she is expected to pay it sand what the Allies are likely to do in case they are not satisfied? The whole condition of Europe can never recover until there is something, at any rate, approaching certainty as to the bill that Germany is to have presented to her, and as to the time she is going to be allowed to pay and the concessions that may be made to her in order that payment shall be made. I think the nations ought to be very reasonable in this matter. Certainl the policy pursued up to now has resulted in nothing more than reparations, which have been practically eaten up by the Army of Occupation. French houses are still unbuilt. French villages and towns are still in ruins. The method at present pursued means that inevitably the ruins will remain and the houses will not. rise. As a matter of fact, even if Germany pays her all the money in the world, France has not the workers to repair the ruin, and it. could be a very fitting thing indeed that German hands, with German materials and German technical skill, should be asked to rebuild what. German guns have blown down, and I believe the German Government, and certainly the German organised workmen, are willing to make that one of the first reparations to be made. Only the French are in opposition to that method of reparation. If the present policy is pursued there is no end to the dispute. I am told on the best authority that France lacks 200,000 building workers for her present capacity for reparation, and what she would do if she were paid everything that had been prescribed by the Treaty of Versailles I cannot say. I want, even with the humble voice of a back bencher, to suggest, if one, may suggest it to France, that it would be fitting, and a tremendous moral lesson to the world, if German goods, German men, German money and German technical science were engaged in building what German guns have destroyed.
We hear a great deal about the condition of affairs in Germany. On the one hand, we are told that the Germans are amassing capital in tremendous quantities, which they are sending abroad, that there is no unemployment in Germany,
that everyone is contented, happy and well fed, and that the Germans in reality are much better off than we are. That is not my experience. I find in going through German cities which I have visited a great deal since the War—cities that I had seen before the War—there is a tremendous difference in that country. I do not incline to the view that the Germans are as well off, or anything near as well off, as they were before the War. I know one big trade. I am the secretary of the international Organisation connected with it. I know that wages in that trade have gone up 14 times, or had done a few months ago, but it is extremely doubtful if wages now are 20 times what they were in 1914, and I am positively certain that the ordinary cost of living is at least twice 20 times more than it was in 1914. The Noble Lord shakes his head. I venture to express again the same opinion. [Interruption.] I. do not see what Alice in Wonderland has to do with the argument. The hon. Gentleman's practical sense of humour escapes me. I was trying to state a serious thing in a serious way, and there is no levity about the condition of affairs. There was a few months ago at. Charlottenburg an investigation into the condition of the children attending a school in a middle class district. It was found that 30 per cent of the boys in that school were without shirts. [Interruption.] I have been speaking about the condition of the workers. Now I am speaking about the condition of the middle class. The middle class women are trying by all kinds of methods, to eke out their clothes, and it is almost a certainty that, given another 12 months of similar conditions, the great lower middle class and professional class in Germany will be in rags. Those are facts as I have found them myself. I can only speak from my own personal investigation, claiming nothing more than an honest endeavour to find what was the truth, and to find it in the best possible way.

Mr. GIDEON MURRAY: How long ago?

Mr. SHAW: It is nearly five weeks since I came back the last time and eight weeks since I came back the time before. I have been told that the latest demand of either the Guarantee Committee or the Committee on Reparations is that German public expenditure, both
national and local, should be submitted to allied control. There, again, my information comes from a source that ought to be reliable. It comes from a Member of the German Reichstag, who told me that the demand was that every public expenditure of over 500,000 marks, whether local or national, should be subjected to allied control. If that be the case, I suggest that in a huge country like Germany there must be hundreds of thousands of these schemes, and if every one of them has to be submitted to the control of some Allied civil servant, it means sending a horde of civil servants into Germany who will be like, locusts and will eat up far more than they are likely to gain by the control they exercise. I make the statements with due reserve, simply stating again that they come from a Member of the German Reichstag, who ought to know what he is talking about.
I want to suggest that the best way of getting reparations out of Germany is to get them in a friendly way. The present position of Germany is an extremely difficult one. We have need of stability all over Europe. When one thinks of the exchange in Poland, in Austria, and now in Germany, surely it behoves one to think as to the best method of finding a remedy. Suppose our Allies convince the Germans that the roost ruthless force will be used to get compliance with the terms of the Versailles Treaty, and that we convince the Germans that there are no bowels of compassion amongst them, what is the result going to be? Already in Germany any observer can see two main streams. You have Bavaria in the south inclining strongly towards monarchy and forming a real danger to the Republic, and the Communists in the north working as they alone know how to work. There is one thing Communists can do. They can work, however mad they may be politically. You have the two streams, and between them you have the Republic, the only guarantee of solvency in Germany, and the only guarantee of reparations. If you push the demand to such an extent that you drive the Germans into the arms of either of these sections, you can bid goodbye to reparations and to the stability of Europe. So I am making an appeal for a reasonable and even a friendly consideration. I was brought up in a workman's home, but I was taught
that it was wrong for an Englishman to jump on an enemy he had defeated, and I am making an appeal for a principle that is well known amongst the members of our race all over the world. When you have defeated an enemy be as generous as you have been courageous. Incidentally, I believe that policy is not only true in ethics, but, in this particular case, would be true in economics. I fervently believe the only way to get real reparations out of Germany is by giving Germany a chance, and a real chance, of recovery. Do we want to drive her, I wonder, to the position that Austria is in?
I received a letter yesterday from a friend in Austria, and here are some of the figures he gives me. A kilo and a quarter of bread now costs 2,200 kronen, a kilo of sugar 8,000, a kilo of beef 8,000, a very poor quality suit of clothes 150,000, shoes 30,000 and a poor kind of shirt 20,000 kronen. It does not need many more months of the same method of dealing with the German mark to reduce Germany to the same state as Austria. The collapse has been sudden and violent. The state of affairs in Europe can be best explained if I tell the House a story. It is said that after the Genoa Conference the Prime Minister called a waiter and gave him a number of £1 notes as a tip. He received very profuse thanks. Then came along M. Berthou, who also presented one or two 1,000 franc notes. Again profuse thanks. The German representative handed over a handful of 1,000 mark notes. Thanks again, but not very profuse. The Austrian gave him an official looking document, and explained to the puzzled waiter that it was an acknowledgment from the station that a truck with the notes had arrived and he could fetch them when he wanted. Then came Comrade Tchitcherin, who handed over a heavy square packet. The waiter opened it and found a number of plates that looked like solid gold. Tchitcherin said, "Do not worry, they are not gold. They are simply copper printing plates for 10,000 rouble notes. Print as many as you like." I have told this story at a number of meetings in France where I have been speaking on the same subject, and they, too, have laughed. This story, however, hides a tragedy. The copper plates of Tchitcherin and the truckful of
notes from Austria mean that children are starving both in Russia and in Austria. It can be of no benefit to us that children may starve in Germany. We cannot get reparations out of Germany except in two forms. Gold is out of the question. She can only pay in goods or in service. If France will not accept service for reparation then she can only have goods. She can only be paid in goods if Germany is prosperous. If Germany cannot export goods there can be no reparations for France, and yet we are all trying to stop Germany from sending goods out of Germany, and at the same time we are all talking about reparations.

Lieut.-Commander KENWORTHY: Safeguarding of industries.

Mr. SHAW: I am not talking about the safeguarding of industries at the moment. I am talking of what I consider to be elementary economic facts. Of course, there may be differences of opinion about them. From the Labour Benches we ask that it should be the policy of the Government to confine any claims for reparations from Germany to the actual material damage done in France, Belgium and the Allied countries. We believe that it would be very difficult for Germany to pay event that amount, hut Germany ought to pay. There is no question about that. The sole question is as to best method of getting it. We cannot realise it by going on as we have gone on so far. We have armies of occupation. Nobody heard with greater joy than I did that the cost of the army of occupation has been reduced. It is a fact that a sergeant in the British army of occupation costs Germany more than her highly-placed civil servants, while four Allied generals cost more than the President of the German Republic, the Chancellor of the Exchequer, all the Ministers and all the Under-Ministers. Can anyone wonder that the Germans are, for economic motives, desiring that the army of occupation should disappear as quickly as possible We hope to see the time when by a genuine arrangement with Germany, arrived at with a Germany that is a full and equal member of the League of Nations, it may be possible to get reparations without an army of occupation. An army of occupation must necessarily interfere with the manage-
ment of the internal affairs of a country. I do not cant to speak about the introduction of black troops into the Rhine district. I have seen them, and I know what I should feel like if in my own town, no matter what England had done, we were guarded by black troops. I know what I should think, and I think I know what I should do. We are in favour of the withdrawal of the troops as soon as possible, and reparations being made by Germany as a free and independent member of the League of Nations. That is the best thing that could be done.
Let me deal with one further aspect of the question. There was a committee of experts, a committee of bankers, set up. Surely the common-sense thing to do would have been to say to these experts: "Without any bond on your capacity, without any limit to your terms of reference, sit down and tell us what in your opinion is the thing that can be done, and the best way to do it." Was that allowed? Not at all. The bankers were literally stopped from saying what they considered necessary under the circumstances, and what was the best thing to do. Surely that is one of the first things that ought to be done. We can pretty well agree, even the Germans will agree, to a reasonable amount of reparations; but reparations in the way we are demanding them and by occupation is absolutely impossible. We believe that the only thing it is possible to get out of Germany is material reparation for the damage done in the allied countries, and the best way to get it is not by an army of occupation and by threats, but by a careful investigation and by holding out the hand of friendship. The best way to get reparations is to make the German, or rather to get the Germans to rebuild what they have knocked down. The best and the truest way to get peace and security in Europe is to make it quite definite what Germany has to pay and what terms will be allowed. In the present chaotic state of things, nobody knows what she is to pay, and exchanges are tumbling down like houses of cards every day. Threats can lead to nothing, military occupation cannot lead to satisfaction, and it is time we had another policy in operation. It was with the greatest possible gratitude that I heard whenever the Chancellor of the Exchequer did express a sentiment that his sentiment
was on the lines I had indicated, a sentiment which realises the necessities and possibilities of the situation, and a real desire to come to a settlement which will give Europe peace, stability and prosperity.

Lord ROBERT CECIL: We have listened to an extraordinarily interesting speech, full of facts gathered, not from second-hand information, but from firsthand information and personal investigation. There was one observation made by my Noble Friend the Member for Hastings (Lord E. Percy) with which I entirely agree. I do not think it is possible for the House of Commons or for any private Member of the House of Commons to attempt to lay clown the policy which the Government of the day should pursue. That must depend on a number of facts which are not known to the House and to Members of the House, and all that Members can do is to speak in somewhat general language and to indicate what they think ought. not to be done in this very serious crisis. My view of it depends entirely on the seriousness with which the present crisis is regarded. The Prime Minister in the Debate on The Hague Conference referred to something that I have said. He said:
I do not accept the view of the Noble Lord that things are getting worse in Europe. If you compare Europe as a whole to-day with the Europe of three years ago, things are better. There are parts of Europe which may perhaps be conceivably worse, but, taking it as a whole, the well which was exhausted by the War is gradually filling."—[OFFICIAL REPORT, 26th July, 1922; col. 546, Vol. 157.]
I do not know whether the right hon. Gentleman will repeat that view this evening. I hope that he may be able to do so. I confess that my reading of the position is that Europe is much worse than it was, and that the situation is extraordinarily serious. I read the other day a statement by an American banker, Mr. Vanderlip, who, like the hon. Member for Preston (Mr. T. Shaw), has gone to the trouble of investigating these things for the last two or three years, personally. He has travelled extensively in Europe, and made a great number of inquiries. This is the view which he expresses:
The continually growing financial catastrophe is by no means confined to Germany. Austria, Hungary and Bulgaria are on the brink of ruin. Even Italy is in an exceedingly precarious position. It is not the War that has been the cause of the
great losses, but the character of the Versailles Treaty. Versailles has proved disastrous for the victors as for the vanquished. Germany must soon collapse unless radical changes are made in the reparations burden.
He points out that he thinks France ought to show a more reasonable spirit, and proceeds to say:
In Germany there will soon be grave and growing unemployment which will coincide with rising prices and increasing inflation. The consequences must manifest themselves in street revolt and social chaos. In June an international loan might well have saved the situation. German bankruptcy will undoubtedly bring with it the bankruptcy of France. With partial remedies there is nothing further to be done.
7.0 P.M.
I should not have quoted this statement if it had not already been published broad-cast in Europe. It was published originally in a foreign newspaper, and republished in the "Daily Telegraph" here. That is a very serious statement. The hon. Member for Ilford (Mr. Wise) drew a very melancholy picture, and my hon. Friend who has just spoken drew an exceedingly melancholy picture of Europe. It all depends whether, in considering what remedies should be applied, you accept broadly that view of the circumstances, and realise that we are face to face with an economic crisis of enormous gravity. If so, one must be prepared for heroic remedies for treating the catastrophe that is threatened. I listened with great attention, as I always do, to the speech of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) and with the greater part of his remarks I was in complete agreement; but when he repudiated as altogether ridiculous the possibility that this country may have to face even what he regarded as the quixotic measure of abandoning the debts due to us, even if we have to pay our debts to America, I think his estimation of the seriousness of the situation must be different from mine. That may or may not be the right thing to do. I am certainly not prepared to say that in the present immensely serious situation we should not be well advised to face even such a sacrifice as that, if it were really the only way to reach a solution of our difficulties. A settlement we must have, We must have it in order to secure relief from the dangers that are threatening. Let me say a word on Mr. Vanderlip's statement that the Treaty of Versailles is
the cause of the trouble. I am afraid that in many quarters, and I am not now speaking of the Government, the same spirit prevails. The fundamental mistake that was made was in treating reparations on the economic side as part of the punishment of Germany. That really was a profound error. The whole purpose of reparations was to give compensation to this country and to our Allies. It was not for the purpose of punishing Germany. That was the fundamental mistake that was then made. Let me give an illustration from Bulgaria, which has quite recently come to my knowledge. In Bulgaria there is a university at Sofia. For that University the Georgieff Fund had been established before the War, which was being used for the repair and upkeep of the University buildings—a very essential work. A large portion of that money was in England at the time of the War, lodged there in order to finance purchases of building material, steel, and so on. It has been seized by the British Government under the Reparation terms—quite legitimately, so far as the Treaty is concerned, no one can dispute that. This 12,000 has been taken from the University of Sofia by us, as far as our debts are concerned.

Colonel Sir JAMES GREG: Why not?

Lord R. CECIL: I will tell my hon. and gallant Friend why not. This £12,000 meant an insignificant fraction of the monetary injury we had suffered, but to the Bulgarian University it was a matter of the greatest possible importance. It is quite true, as my hon. and gallant Friend will no doubt tell me, that the University had their remedy against the Bulgarian Government. Of course they had, but. there is not the least possibility of the Bulgarian Government finding the money. That means, in effect, that for an amount of money which cannot be regarded as in any real senses compensation to us, you are going to cripple this University. The consequences are that since the Bulgars, as the House is no doubt well aware, are a very highly educated race—scarcely any of them, only about 2 per cent. of the population, are illiterate—they have not been able to get their University teaching. They are looking about now to find where they can go. They cannot afford to go to England or to
France; they cannot even afford to join the Robert College, which is in those parts. They can go to Germany because the exchange is so much in their favour that they are able to pay. The only effect of this policy, which is to give you a reparation of £12,000, which, I suppose, would pay for two minutes of the late War, or something of that kind, will be to drive the Bulgars to get their education in Germany.
If we regarded reparation from the true point of view—not as a punishment to our enemy, but as a compensation to ourselves—I cannot believe that a policy such as that could ever have been sanctioned by any Government. Take tic case of Germany. I think it was a profound pity that at the time of the Conference we did not discuss fully and freely with the Germans this question of reparation. It was not discussed at all. The Germans made an offer, which they called an offer, of 5,000,000,000 marks. It was not 5,000,000,000 marks, or anything like it, because, allowing for discount and so on, the great part of it was deferred payment, which was calculated at somewhere about 1,000,000,000 marks. Still, it was an offer. If we had been considering, not what Germany ought to pay or what punishment ought to be inflicted upon her, but what we could get out of Germany by way of compensation for our great losses, we should have negotiated with her and seen how much more than her first proposal—she would probably have gone much higher—she could have been induced freely to offer. The result of all this has been two-fold. In the first place, you have put the German Governments that have held office in German in an impossible position. They are always being driven to go to their people to ask for some fresh effort, all of which will be, as has unhappily turned out, unavailing. The result has been that is has contributed to what is the great danger here, the extreme weakness of the German Government. That danger is recognised by every right hon. Gentleman on the Government Bench and, as I happen to know, by every other statesman in Europe. It is a great danger. The Chancellor of the Exchequer, in his speech, which we all admired, said that the Germans have not taken the proper financial measures. I agree, and we all agree that they have not done so. Why? Because they have been too weak.
I do not believe any right hon. Gentleman on the Government Bench will deny that the German Governments have, generally speaking, desired to meet the demands of the Allies and to take proper financial measures. They have been unable to take them because they have been too weak. One of the reasons why they have been too weak is that they have been put in an impossible position by the terms of the Treaty they are supposed to fulfil.
There is another great question. We imposed on the Germans, as the Chancellor of the Exchequer said, an indeterminate payment. The result of that was that everything the Germans had by way of surplus was to be handed over to the Allies. There was no inducement for them to pay; they had no hope of paying. They were in quite a different situation from the French in 1870, when the latter were able to pay off their indemnity in three years.

Sir J. GREIG: The Germans did not think they were going to pay in 1870.

Lord R. CECIL: What does that matter? I am dealing with what actually happened. I wish the hon. and gallant Gentleman would get rid of that idea; it does not matter whether they were right or wrong. The question is, how are they going to deal with a business proposition? What has been the result? Let us take one case, to which the right hon. Gentleman referred the other day, that of the mark. What do you expect Of course the Germans got rid of their capital out of the country as quickly as they could, in order to save it from what, from their point of view, was a perfectly useless payment to the Allies. They were bound to do it. Believe me, you get no good by ail these Committees of Guarantees, these regulations of the export of capital, and all the rest. They only still further hamper the capacity of Germany to pay, and Make it still more difficult for her to meet her obligations. I very earnestly hope that we have come to the end of this mistake, which has cost us and Europe very dearly. We must abandon that conception of dealing with the situation. We must be prepared to take a large view, and not merely that of a moratorium for a year. That is not going to cure Europe. We have got to get right down to the very foundations of the thing, and try to arrive at a solution
and a remedy. Since we have signed this Treaty, and as we desire what is in effect a modification of it, we must be prepared, if necessary, to make concessions in order to obtain that modification. I agree most fully with what the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) said, that the reduction of armaments is quite as essential a part of the restoration of the economic position in Europe as the settlement of the reparation question; but you will not achieve even a reduction of armaments until you can get rid of this poison. in the international atmosphere, which is exaggerated by the reparation question. As was put to me very strongly by a gentleman in Paris the other day, it is quite true that it poisons the whole international atmosphere. Until you get that settled, you will not get back to a peace mind.
I said, in the beginning of my observations, that I would not attempt to lay down any exact policy for the Government. I venture, however, to assure them of this—whether they will value the assurance or not, I do not know—they need not fear about getting the support of the country for any measure they may take, however bold, and however, apparently, not in the immediate and direct interests of this country, provided it is going to produce a settlement. I am satisfied that our fellow-countrymen are wise enough to see that the settlement of the European situation is of far greater importance than any question as to what exact amount you are going to claim from the Germans. I ask the Government to treat this thing boldly and courageously. We have not any time to lose. The situation is intensely serious. The margin of economic safety which, to my mind, has always been very small—I ventured to tell the House so in September, 1919, and I have not varied from that view—has now become so small that it is very doubtful whether anything we can do will save Germany and Europe at large from the catastrophe that threatens. I earnestly appeal to the Government and the House and, so far as my words may reach them, to those outside the House, to take a broad view of the situation, and not. to be deflected, through any operation of national self-interest, from making a really sound and statesmanlke decision.

The PRIME MINISTER: I had almost made up my mind not to intervene in this discussion, because I should have been very glad To have left the statement, not merely of the Government case, but of the case of the British Empire. to rest upon the very able and clear speech of my right hon. Friend the Chancellor of the Exchequer. But there have been two or three things said in the course of the Debate that I cannot possibly allow to pass altogether without some sort of correction.
I was frankly disappointed with the speech delivered by the right hon. Gentleman the Member for Paisley (Mr. Asquith). It was a very unhelpful speech on a very serious situation. It is all very well to say that he appreciates the point of view of France, and that it is reasonable that since she has got to pay her debts to us she should press Germany. The right hon. Gentleman can understand the point of view of Germany, and thinks that is also reasonable—that she wants a reduction of the claims against her. He can understand the point of view of America, and thinks it reasonable—that she insists that we shall pay the whole of our debts. In fact, he went so far—and I regretted it—as to say he did not think there was any moral or sentimental ground why America should not press us to pay her debt. The one point of view which the right hon. Gentleman does not seem to understand is the point of view of the British taxpayer. He thinks it most unreasonable that the British taxpayer should not forgive everybody else the debts which are due to him, and quite unreasonable that he should not instantly and with alacrity pay every claim against him. I think that is a most unfortunate speech. It is a speech Which, naturally, will give satisfaction to everybody who wants to get rid of their debts to us as, and great satisfaction to the people who press us for the payment of our debts.
I am sorry that any Member of the British Parliament should think it his duty, under the present conditions, when we have all these difficulties, to encourage all these people who owe us something not to pay us, and to encourage those to whom we owe something to insist upon payment, on moral
and sentimental grounds. My right hon. Friend went on to say that he was in favour of an absolutely clean slate. That is exactly what Lord Balfour said and proposed in his Note. But it is not a clean slate when you wipe off every debt which is due to us, but engrave more deeply on the slate the debts which are due by us to other people. That is not what I call "cleaning the slate." It neither cleans nor adorns it, nor makes it more useful for future use. Therefore, I t egret deeply that my right hon. Friend has made that speech.
He quoted a speech which he delivered two and a half years ago at Paisley, and said: "I have actually been consistent for two and a half years." I know, but he delivered another speech at another election on exactly the same subject. It was delivered after the speech which I delivered on the subject of reparations at Bristol, and my right hon. Friend was asked this question at Pittenweem in December, 1918:
Will you make the Germans pay for the War?
Mr. Asquith s reply was:
Yes. I am in agreement in this matter with what the Prime Minister said yesterday.
His policy then was identical with the policy of the Government. I am not complaining in the least that he has changed his mind. I do not think it in the least discreditable to him that he has changed his mind. The circumstances of Europe are such that you can only judge from year to year, very often only from day to day, as to what is the wise course to adopt. But can anyone say that he has been consistent for two and a, half years in this respect, if he is faced with a declaration of that kind, made at a time when the policy of this country was being framed and when this Parliament was receiving its mandate?
The same applies to the Noble Lord the Member for Hitchin (Lord E. Cecil). He took exactly the same line at the last election. Before I sit down, I will refer to a speech in which he said that he would draw no distinction between compensation, damage and indemnity. He would make the Germans pay all, and the only limit he would impose on it would be the limit of the capacity of Germany to pay. How can Gentlemen ascend a very high pulpit, and lecture
us and say, "You were very wicked at the last election in misleading the electors, and that is what has brought you into trouble," when they said exactly the same thing in exactly the same words, and were very glad to get such measure of support as they could get by doing so?
I do not want to make this a controversial topic, and it is not my fault that it is so. It is because of statements which have been made in the course of the Debate. I was quite willing to discuss only the present policy of the Government and of the Allies in reference to reparations. The Noble Lord makes an appeal to us, and says to the Government, "Take a bold line." He says quite frankly that he does not know what the bold line should be, and that the Government must find it out but, whatever it is, as long as it is bold, he will support it. That is a promise which I have no doubt will he honoured in the votes which the Noble Lord will give in the Lobby when Divisions occur. But the Noble Lord has a tendency to criticise us from both points of view. I have called attention to it repeatedly. Hon. Members will find in speeches, not merely here, but especially in the country—that we are first of all to stand up to France, and to see that she does not press Germany too hard. That is one point of view. That is the point of view which appeals to one section of their supporters. Then comes the other point of view—"Whatever you do, you must agree with France. You must carry France along with you. We sympathise with the point of view of France. We do not think that France is unreasonable." You really cannot put those two policies, and run them together. That is one of the difficulties, and I agree with what was said by the hon. and gallant Member for Newcastle-under-Lyme {Colonel Wedgwood) that you have got to face the facts.
One of the realities of the situation is that it is not only negotiations between the British Government and Germany. It is negotiations in which you have four Allies—France, Belgium, Italy and Japan, as well as ourselves. We put forward a policy. We press it, but there is a point when you have either to compromise or to break. What is the wise policy? Is it that we should make the
best arrangement we can with our Allies, and carry them along with us as far as we can, or is it for us to say to them, "Unless you take our policy such as it is, we will leave this conference, and there is an end of the alliance"? If anybody is talking about bold policies, are the gentlemen who recommend this prepared to give that advice to the British Government? If not, they have no right to say, "You are not bold enough in dealing with this matter."
Take the Versailles Treaty. That was a matter of arrangement between the Allies. Somebody has been good enough to publish a memorandum which, in the course of the discussion, I issued to the Peace Conference. I have no responsibility for publishing it. It was published originally by an Italian statesman. That represented my point of view. It represented not merely my point of view, but it represented the point of view of the British Delegation, and it was the result of very careful discussion among ourselves. I do not say that the Treaty of Versailles carries out literally the memorandum which I put forward, but there is another point of view. That is the French point of view, the Belgian point of view, the Italian point of view, and the point of view of about ten other Powers which had taken part in the War, and had suffered very severely, and were just as entitled to their point of view as the British Delegation. The best we could do was to accommodate all these points of view, and to put forward the proposals which we did.
The Noble Lord has repeatedly said, and has said this afternoon, "You ought to have had, a fixed and determined amount. You ought to have told Germany exactly what her liability was." She offered us the equivalent of £1,000,000,000 sterling. He admits that that is an impossible sum. He said, "You ought to have had some other figure." Consider for a moment what that means. There were two factors, which were accepted by everybody in this House without distinction of party, and which are accepted now—first of all, the amount of the damage, and, second, the capacity of Germany to pay. It was almost impossible to fix either at that moment. Why do I say so? If you were to fix the damage, you had to fix it upon the cost of repairing the damage. You
would have fixed it at a moment when prices were inflated beyond comparison. For instance, most of the damage had relation to houses. There were hundreds and thousands of horses in France which had been destroyed, and there were factories and churches which were destroyed. A house which would cost £400 now would have cost £1,000 then. That gives you an idea of what the fixation of the amount of the damage would have meant at that moment. You would have chosen a moment when prices were at their very highest. Yen may say, "You ought to have anticipated that prices would go down." Who did? What men in business would have said, "In one year, two, three, or four. or ten years. prices will come down to that point"? Who could have said it then?

Sir H. BRITTAIN: No one except Kenworthy.

The PRIME MINISTER: The damage which we claimed was in the main shipping. We lost about 10,000,000 tons, or some figure of that sort. If you were to fix the damage for shipping at that time, the cost was £35 per ton. What is it. now? About £15, I think. lf, therefore, you Lad taken the advice of the Noble Lord (Lord R. Cecil) you would have fixed the damage to be paid for by Germany at a time when the cost of reparations was two and a half times what it is at the present moment. And that. is the way to relieve. Germany, and to save her from bankruptcy! I will take the question of capacity to pay. How could you estimate at that moment Germany's capacity to pay? You would have estimated the damage too high at that moment. You would have estimated the capacity too high. Why do I say that? Trade on the whole was going well. There was a big boom at that time. There was hardly any unemployment, except that men were coming hack from demobilisation, and there was some difficulty in absorbing them But there were big prices, big profits, and high wages. There were shrewd observers who thought. that was going to endure for some time There were others who took a different view, but there were many shrewd oh-servers who were under the impression that the boom was going to last, and there was some reason for that point of view.
The world needed goods, because of the gap of war. There were great arrears in every Department that had to he filled up. There were repairs to be done, and many shrewd observers said, "For the next few years the world will be as busy as it possibly can he in making up these arrears, and in repairing this damage, and we shall have a good time." The capacity of Germany would have been based upon that anticipation at that moment. So, if you had fixed the amount in June, 1919, you might have overestimated the damage, as you would, and you might have over-estimated the capacity, as you probably would. What did we do? We said: "At this moment we cannot possibly fix tie amount" there is another reason which I will give in a moment—"therefore set up a Commission, an impartial Commission"—and I think on the whole even Germany will admit that that part of the Treaty has been fairly and impartially administered by this Commission—"let the claims be sent in, let them be adjudicated on. Let them ho judged first of all upon the amount which it would take to repair the damage, and next upon the capacity of Germany to pay. Meanwhile we invite Germany to make her offer." She did not make the offer. The offer that was referred to by the Noble Lord was something that was done by Count Brock-dorff-Rantzau in May, 1919.

Lord R. CECIL: That was before the Treaty was signed.

The PRIME MINISTER: But this was an invitation after the Treaty was signed. I forget how many months were given to them. There was something like six months given to them to make their offer. They never made their offer, and the Reparation Commission sat down, and adjudicated upon the claims. There was another reason. There was no Ministry in France at that moment which could have accepted any figure such as has been suggested. It is no use, if you are dealing with realities, not to take political realities into account. M. Clemenceau was one of the most courageous statesmen who ever presided over the destinies of France. He was perfectly fearless. He was not afraid of facing opposition in the Chamber, but even M. Clemenceau would have shrunk from going into the Chamber at that time, and urging them to accept a figure which at present might be regarded
as quite acceptable even by French statesmen. Therefore, for political reasons and for financial reasons, it was essential that you should have some machinery like the Reparation Commission, which would have given time for the examination of claims, for adjudication on claims, and, above all, to allow the passion, the temper, and the ferocity of war to subside, so that you could finally adjudicate in a calmer atmosphere the claims between the various parts.
I have gone so far to examine that, in order to make it clear why that policy has been adopted. But I want to emphasise again what was said by my right hon. Friend the Chancellor of the Exchequer—that the amount fixed, six thousand millions odd, is subject to adjudication from time to time by the Reparation Commission. That was introduced in the Versailles Treaty, but, for some reason, critics of that Treaty always conveniently, or from lack of knowledge, refuse to refer to that essential part of the Treaty. It is a vital part of the Treaty. That Commission can sit to-day and say, "Germany, for such and such reasons, cannot pay the amount which was adjudicated last year. She can pay only so much." That is treated as if it were an alteration of the Treaty of Versailles. It is incorporated in the Treaty of Versailles. The action of the Reparation Commission in declaring a moratorium, in reducing the annuities, is entirely under the authority given them by the Treaty of Versailles.
There are, two considerations which I want to put before the House and the country about reparation. My right hon. Friend the Chancellor of the. Exchequer says, and rightly says, that it would be undesirable to enter the discussion next week with the French Prime Minister and the French Finance Minister after committing ourselves to the acceptance or the rejection of particular proposals. M. Poincaré has proposals to put before us. I trust that the House will allow us to go there with a free hand to examine those proposals, to do our best to come to an arrangement. I agree with everything that has been said by the hon. Member for Ilford (Mr. Wise) and the hon. Member for Preston (Mr. T. Shaw), who made such a very able and well-informed speech that gave me much pleasure—that if you press Germany too
hard, you may get nothing. Put it at the lowest, apart from the damage to Europe, apart from the general disturbance of peace; take it merely from the point of view of reparation, and you get nothing. It is what happens when you are pressing a debtor too hard. You may lose everything. You may get so much in the pound, but if you are greedy, and ask for more than that, you may lose even what you would have had had you been a little better advised.
There is also the danger—and I do not conceal it—that you may drive Germany into despair. Whether she throw herself into the bands of reactionaries or of Communists, there is very little to choose from our point of view. There would be no reparation in either case. There would he lots of trouble, but no cash—none. A revolutionary Germany right in the centre of Europe would be a very different thing from a revolutionary Russia. Russia, at best, was a very disorganised country, and in many respects contained a hopeless and helpless population. They ran even the revolution badly, and they ran it in such a way as to discredit revolutions, which, in itself, is an advantage. I think it has been a blessing to Europe that the first outburst of Communism took place in Russia. In fact, I am sure that in that respect. Lenin and Trotsky have been the saviours of society. That revolution has been run so badly that it does not encourage others—and there are others—to follow the example. Germany is different. There it would be a revolution in a well organised country, with a highly trained and an intelligent population, and it would be a real peril to the world.
Therefore, I agree that, from every point of view, it would be a mistake to press Germany beyond the limit of endurance and capacity. But I want to put the other point of view. I am bound to put it. It is a mistake, because of these risks and these dangers, to run away from a fair and just claim. Germany quite understands that she has to pay. It is just what happens between individuals. The Noble Lord (Lord R. Cecil) says that the vice of reparation is that people treat it as if it were the punishment of Germany. Not in the least. When somebody puts you in the court and brings an unjust claim
against you, you get your verdict, and you recover your costs. You are not doing it for vindictive reasons. You are doing it because you are out of pocket, and you want your cash back. It is the same thing here. Germany has inflicted damage by the decision which she took, and by the action which followed it has inflicted costs upon countries which were wantonly dragged into this suit, and they say, "We want to get payment." That is not punishment. It is because we have a debt of over £7,000,000,000, and France a debt of £6,000,000,000 to 27,000,000,000. She has still reparation to make up, and she says that the party which inflicted this damage must contribute towards making it up. That is not revenge. I went to get rid of the idea that it is revenge. As an hon. Member says, it is justice. That is the only claim which we put forward.
We are not claiming the whole of the cost. We have claimed only part of the damage. That is because we say that it is no use claiming the whole cost. There is no country in the world which could pay the whole cost. This is the limit of Germany's capacity. Suppose you go from one extreme to the other. There is the extreme of over-estimating the capacity of Germany. Suppose you go to the other extreme, and under-estimate. Like every other country in the world, Germany is suffering from the fact that the world cannot trade. This is not the time to estimate her full capacity. Suppose that you under-estimate her capacity. Suppose that you put it at a figure, of £1,000,000,000 or £1,500,000,000, and you let her off. What will happen then? I want the House to face that side of the matter. Germany has practically wiped out her national debt. The fall of the mark may have very serious effects on the trade of Germany, hut: she has undoubtedly wiped out her national debt. It has a confiscatory effect; on debts of all kinds. Germany would then be in this position: She would have no national debt, and she would have an external debt of £1,000,000,000 to £1,500,000,000—not a single factory damaged, many of them re-equipped. She has in the last three years undoubtedly been using this inflation for the purpose of re-equipping her machinery, and perfecting her organisation. She has done it largely at the expense of her workmen and her
middle class. I agree with what was said about that by an hon. and gallant Member.
Germany has 60,000,000 people, a very able and highly-skilled population. A time will come when the world will recover. The Noble Lord says that I am too sanguine in my estimate of Europe. I do not think I am too sanguine in my estimate of the realities. I agree that when you come to the agencies and the machinery, there is complete dislocation. But when you come to what I call the "filling up of the well," the production well, it has improved enormously in all these countries in the last two or three years. We have heard what an hon. and gallant Member said about the way the Austrian peasants are working. And the same thing applies to the Polish peasants.
What I want to say is that whether it come soon, or whether it come late, the world will recover. Men are working, and that is the basis of recovery. Workmen of all ranks and all classes are working as they have not worked for years; the labour of the world will heal the wounds of the world, and it will get strong again. These troubles will vanish when the world has recovered, and you cannot quite say what is going to happen. After the Napoleonic Wars, there was the sudden accession of invention and discovery, which nor merely enabled England to advance at a rate beyond that at which she was advancing before, but enabled her to leap forward. You cannot tell what is going to happen. The troubles of the world are forcing the brain of the world to think how to get out of its difficulties by all sorts of appliances and inventions—how to save here, to expedite there, to facilitate elsewhere, and generally how to increase wealth with as little waste and with as much power as possible. When that comes, beware lest you have a well-equipped Germany with its 60,000,000 people, with no internal debt, with an external debt which was fixed at a time when things were pretty bad, and an England with a debt of £7,000,000,000 and an external debt—which we are told neither sentiment nor morality ought to excuse our paying—of £1,000,000,000, entering into competition. I wish to look on both sides, and when my right hon. Friend the Chancellor of
the Exchequer and I enter into the Conference on Monday, we shall bear both these considerations in mind.
There is everything to lose by driving Germany too far, but Germany went into court, and Germany had the verdict against her. Although it was the verdict of the sword, it was the tribunal which she chose herself, and she is estopped, at any rate, from saying that it is not a just verdict. That is the arbitrament to which she chose, to put her fate and the fate of Europe. She said, "We will trust the cannon; that is where the settlement is." It has settled the issue, and Germany has no right to say now, "We reject the sentence given by that tribunal," because that tribunal was her own choice. That is the position as I see it.
When we meet on Monday I shall, as I have done all through, resist any proposals which will simply have the effect of increasing the disintegration of Europe, without securing anything for ourselves. But there is one thing I want to say, and I think it essential that it should be said. I object to anybody saying that this trouble has to be* settled at the expense of Britain. We are there on equal terms; we are there, if you like to call it so, at a meeting of creditors in a concern which declares that for the moment it is—I do not say insolvent, but that it cannot pay. We have our claim, France has her claim, Italy has her claim, Belgium has her claim, but we must be considered quite equally. If we put forward a proposal that for the moment there should be a moratorium, a reduction in the annuity, it cannot be said to us, "If you do that, it must be at your own expense." What meeting of creditors has ever met under those conditions?
We go there, and whatever abatement be made, if there be an abatement, must he made all round. We shall do it in the interests of all. I agree that it is a difficult business, and I do not think you are going to settle it in a Conference on Monday. There are too many difficulties and too many complications. You have got to get the facts into the mind, not merely of the people of this country, but of the people of the Continent, and that is a difficult matter. It is the most difficult thing in the world to get people to face realities, and it is not going to be an easy matter in this instance. You
must judge the capacity of Germany perhaps not on the basis of a lump sum, but you must judge the capacity of Germany to transmit wealth across her frontier. That is a difficult matter, but whatever be done, I hope we shall be able to march together—France, Belgium, Italy and ourselves. We will give reasonable consideration, sympathetic consideration, to every claim that is put forward. Britain is the last country to be accused of want of sympathy with her Allies. If anybody says that, I will show him a few figures which ought to answer any charge of want of sympathy on the part of Britain with France. We shall consider everything put forward by France, Belgium or Italy, but when the taxpayers of this country are bearing such a crushing burden, when, as my right hon. Friend the Chancellor of the Exchequer pointed out, they are bearing the most crushing burden of any people in the world, and when the fact that they have undertaken that burden is going to affect them for years to come, we cannot go there and say, "We will look after the interests of everybody, and we will see that everybody gets fair play except the people of our own land." We must have fairness to Germany, and nobody has stood more for that than I have. We must have justice and fairness, but justice means justice for the people of our own land.

Sir GODFREY COLLINS: The right hon. Gentleman in the concluding passages of his speech drew an attractive picture of a Germany without any national debt, with her factories untouched, competing in the markets of the world with Great Britain and America. As I heard the Prime Minister give expression to those utterances, I wondered why the Government had not adopted that policy themselves, because if that policy be the correct one, and if the picture drawn by the Prime Minister is accurate, then I take it, in his opinion, bankruptcy is better than solvency, because, undoubtedly, the picture which he has painted will go out to the public as showing that Germany will be a more skilled competitor in the markets of the world by reason of her present policy. Surely the Prime Minister excelled himself. In his opening utterances he was the champion of the British taxpayer—the Prime Minister who has laid a heavier burden on their
shoulders than any Prime Minister or any chief of any country in the world, who has taken from the pockets of the taxpayers millions of money and poured it out in useless enterprises in every part of the world. Yet he has the audacity to come here this afternoon and make out that he is the champion of the British taxpayer, when his policy is driving many firms into bankruptcy. Unless I am much mistaken his foreign, policy is driving Germany into bankruptcy. In addition to driving firms in this country into bankruptcy, he is now driving nations into bankruptcy.
8.0 P.M.
The right hon. Gentleman quoted from speeches delivered by my right hon. Friend the Member for Paisley (Mr. Asquith)—as if election speeches should determine the policy of British delegates when they meet the representatives of Allied countries sitting round a table in Paris. The Prime Minister went to Paris as a trusted representative of the British people, and if that Treaty had been successful he would have been entitled to come to the House and point out that his policy had led to peace in Europe. He described the speech from which he quoted as unhelpful, but, at any rate, my right hon. Friend the Member for Paisley had the courage, this afternoon, to tell the public the truth about the debts of our Allies. For four long years the public outside have lived on hopes raised by the Prime Minister. They do not believe now the promises which he held out that money would be forthcoming from Germany. My right hon. Friend the Member for Paisley had the courage to state what everybody knows, and what the Prime Minister knows in his own mind, that the debts of our Allies are not worth 20s. in the £, and the sooner we realise that the better. After waiting four years to find out that the specious promises made by the Prime Minister that large sums would be coming from Germany to pay the cost of the War are unfounded, are we to wait another four years on the strength of the promises and hopes now held out by the Prime Minister that the debts of our Allies are to be paid in full? The sole record of the Prime Minister, so far as the question of reparations from Germany is concerned, is a simple one. It has cost this country £56,000,000 to collect £54,000,000 from the German people. I wish the Prime Minister would
face realities. An opportunity has come to the British people to-day to face a large issue, one which seldom comes to a nation. I think myself that the problem of international debts cannot be settled in the spirit of the counting house, balancing one against the other. We have to take into account the situation which we find in Europe to-day, a Europe rent asunder by difficulties, staggering under a load of debt, deluged with worthless paper money, some countries still buoyed up by false representations, others driven forward by hatred, with the vagaries of exchange apparent to all, yet the British Government consider that this is the time to tell these nations, and to tell the public outside, burdened with taxation, that they should demand and that they should receive the payment of our loans made during the War. To my mind, a more cynical disregard of realities it is difficult to conceive. I think myself that enlightened self-interest points in another direction. Let them create and not crush these nations. The British Government offers to be generous if other countries are generous to us. It is not in that spirit that Great Britain faced the struggles during the War, nor was it in that, spirit that the nation welcomed the League of Nations in 1918, but this Note that is associated with the name of Lord Balfour proceeds an that basis. I am tempted to quote the words of Burke in this connection, but, as it might appear to be slightly personal, I refrain from doing so. Magnanimity is always the soundest policy in politics.
Our policy in regard to reparations has been made quite clear by the right hon. Gentleman the Member for Paisley. There is a distinct line of cleavage between the two sides of the House on that point, and I think, when they consider the long record of the Prime Minister so far as the question of reparations is concerned, the public outside will take note of the promises made, of the hopes which have been raised, and that they have all been dashed to the ground. When they remember that, and consider that the right hon. Gentleman the Member for Paisley has this evening had the courage to explain to the House of Commons and to the public outside that in his judgment—and I quite agree with him—the best thing this country can do is to face the realities of the situation, to scale down the indemnity, to ask for only the amount
of material damage done to civilians during the War, to forgo our claims in favour of France and Belgium, and cancel the loans to these countries, they will agree that only by these means shall we take a step forward in putting Europe on its feet again.
At the beginning of the Session the Prime Minister challenged certain statements of mine about the bearings of reparations and unemployment, and, speaking in this House on the 9th February, he quoted Dr. Rathenau's figures at Cannes dealing with the export trade of Germany, in which he pointed out that Germany's export trade was only 25 per cent. in comparison with what it was before the War. He then went on say—and I quote his exact words:
Ours is certainly more than twice that percentage, even in a bad year.
In other words, that our export trade in a bad year was over 50 per cent. of the pre-war figure. I have since then had an opportunity of analysing the Board of Trade figures, and I find that in 1913—I am quoting from the estimated British exports in tonnage according to the Board of Trade figures—our exports amounted to 91,800,000 tons, and in 1921 to 33,000,000 tons, or about 36 per cent. If the right hon. Gentleman will analyse the Board of Trade figures himself—

The PRIME MINISTER: That, surely, is not the case. You have got coal. You must take values, and the comparison drawn by the Board of Trade is a comparison of values upon the 1913 basis. If you take this year, it is 67 per cent. I have had it worked out on the Board of Trade figures. Those figures were worked out on the basis of values, and this year it is 67 per cent.

Sir G. COLLINS: I am taking the Prime Minister's own basis. He was dealing with quantity, and in dealing with trade questions he will agree that it is not so much the figure that is under consideration, but the total tonnage in goods, and now the Prime Minister says you should delete coal.

The PRIME MINISTER: No. The hon. Gentleman must quote me accurately. All I want to say is that a ton of coal would be the equivalent of a ton of silk or of cotton manufactures. You must take the quantity of goods and the quality of goods if you are going to compare
one year with another. I took the method of the Board of Trade, and I think it, is a sound one.

Sir G. COLLINS: The right hon. Gentleman is entitled to take the method of the Board of Trade, but I am taking his own basis, and he dealt with quantity, and advanced this argument in reply to myself, and surely he will agree that a ton of coal exported to a country is a very valuable export to our miners. Evidently the export of coal, when you are dealing with large quantities, gives employment to large numbers of people here. The right hon. Gentleman went on to say:
The causes of unemployment are of a totally different character. It is attributable to causes deeper and more far-reaching. They are causes which will take a long time for the world to get over. They are the exhaustion of the resources of the world."—[OFFICIAL REPORT, 9th February, 1922; col. 406, Vol. 150.]
There is no word in that statement that our export trade is disorganised through the depressed state of Europe, through this large indemnity banging over Europe. Several speakers this afternoon have quoted the opinions of America. Let me quote the opinion of the Bankers' Committee, which sat in Paris on that subject. They believe
that a resumption of normal conditions of trade between the countries and the stabilisation of the exchanges are impossible without the definite settlement of the reparations payment, as of external debts.
We argue that while this open sore exists in Europe our trade cannot go back to its pre-war level, and it is because we believe, and are stating so in public, that the policy of the Government announced this afternoon will not bring that rapid return which we all wish to see that we have challenged the policy of the Government this evening.

Major CHRISTOPHER LOWTHER: The question that I desire to raise is a difficult, a complicated, and a technical one, and it has this advantage, perhaps, over the wider question of reparations, that the British Government can itself afford considerable relief. The position arises in Articles 296 and 297 of the Peace Treaty of Versailles. Article 296 lays it down that all debts of ex-enemy aliens contracted before or during the War to British nationals, and vice versâ,
must he paid through clearing offices established by the high contracting parties, and each high contracting party is responsible for the debts of its own nationals. The point of that Article appears to me to be this, that the State takes the place of the creditor and debtor in respect of the collection of the debts to which I have referred. Article 297 deals with property, rights, and interests, and the most important part of the Article, as I understand it, is that the Allies may seize, retain, and liquidate all property, rights, and interests belonging to ex-enemy aliens at the date of the coming into force of the Treaty. Of course, at the same time there is an obligation upon Germany to compensate her nationals who have suffered from the seizure of their property over here. Out of the property so seized, compensation is to be paid to those who suffered injury or damage inflicted upon their property, rights, and interests by our ex-enemies. Before passing to the practical effect of these Articles, which is the subject of a very interesting interim Report, I would like to make a few short, general observations oh the Articles themselves. I do not know whether the House realises that, as regards compensation which is paid by the German Government to its nationals for property which has been seized over here by the British Government, compensation is paid at the rate of only 75 marks to the £. It is perfectly evident that compensation paid upon that basis, when at the present time something like 3,500 marks go to make a £ sterling, represents little less than blue ruin, but with other ex-enemy aliens, such as Austrians, Bulgarians, and so on, no compensation whatsoever is paid by the Governments of those countries to their nationals, and for a very good reason. If they cannot afford to pay their own civil servants, if they cannot afford to pay for the bare necessities of the State, obviously they cannot afford to compensate their nationals who may have had their property over here sequestrated under the Articles of the Treaty.
As regards Article 297, I think it establishes what must be en entirely new principle, and that is you can take the property of a person over here in order to satisfy the debt which is owed by a man in Germany to an Englishman; that is to say, that you take A's property
to satisfy a debt owed by B to an Englishman. The Treaty goes a good deal further than that, for the British Government may sequestrate the property of an Austrian over here in order to satisfy the debt due by Germany to England. And not only is there a seizure of ex-enemy alien property and rights over here, but the seizure is complete. It comprises personal ornaments, I believe, furniture, cash at the bank, and, in fact, everything. It may be argued that it is certainly incumbent upon Germany to make good what has been seized by the British Government of property belonging to her nationals over here. I have endeavoured to point out that, in fact, those who have their property sequestrated receive very little compensation indeed from the German Government, and, in the case of the other ex-enemy alien Governments, no compensation at all. I know there is a school of thought and a good many people who will say, "Serve them right, after all. They are nationals of a country and of countries which waged a savage, merciless, ferocious war, and anything that may befall the nationals of those countries serves them right."
I cannot honestly subscribe to that view. I think that it is contrary to British tradition, when the enemy's Government has been beaten in war, and when peace has been declared, to carry on the war against what are, in fact, defenceless private individuals. It was recognised by the Board of Trade that hardships were bound to arise, and I am not going to stress the broader point, but will devote myself to this particular side of the question. The Board of Trade, in order to alleviate these hardships, set up a Committee, which is presided over by Lord Justice Younger, and of which, I believe, the hon. and gallant Member for Reigate (Brigadier-General Coekerill) is a member. In May of this year that Committee made a very interesting Interim Report. They had by that month had some 900 applications before them for relief, and I believe I am not overstating the case when I say that they have come to the conclusion that the actual working of these Articles is very defective. The Report of the Committee says:
The Treaties have not in this respect functioned according to their terms: the German Treaty has so functioned only most imperfectly; the others net at all. The
result has been a growing suspicion and dislike of these Clauses in their actual operation, accentuated by the fact, which now seems certain, that in the final result they will operate with the greatest degree of harshness in the cases where it would be either the desire or to the interest of this country that they should not operate at all.
The cases to which the Committee referred are, in the first place, English women who have married ex-enemy alien subjects, and I do not know whether the House realises, but it is a fact, that where an Englishwoman, between the date of the Armistice and the coming into force of the Treaty, married an ex-enemy national, her property was sequestrated by the Board of Trade under these Articles of the Treaty. I believe that the greater part of the property in question is property which is known as "marriage settlements," that is, settlements which are held by trustees for the benefit of the married couple. The other cases to which this Committee particularly turns its attention are cases where a man has had sons fighting in the War for this country, where a man or a woman either by the sympathy or the active help which they have shown to the Allies during the War, have been exempted from internment and repatriation; in other words, people who, during the War, were considered, not in the light of enemies, but in the light of friends, and now find themselves after peace has been declared, penalised as if they had been our bitterest enemies.
Let the House bear this in mind also, that where a German woman marries an Englishman, her property remains free. It applies only in the case where an Englishwoman marries a German. If Members are sufficiently interested in this matter to read, in words far more apt than I could ever put them, some cases of hardship which have arisen under these Articles, may I respectfully counsel them to look at the Report of Proceedings in another place, which, I think, makes astonishing reading? I will not venture, of course, to repeat anything of what took place there, but I would call the attention of the House to two judgments which were recently given in the Court of Appeal which are very pertinent indeed to the question I am raising. The first case was that of a man who had dual nationality, and the second was a case of the nationality of an Englishwoman married to a German. The first case was one
where a man had acquired British nationality, and, at the same time, was a German national. Judgment was given in the Court of Appeal to the effect that his property should be sequestrated by the Board of Trade under the Articles of the Treaty. But there was a dissenting judgment, and it is to a phrase or two, in that dissenting judgment to which I would venture to call the attention of the House. Lord Justice Younger, who was sitting on this Appeal, said that the question affected a large number of persons other than the appellant and it would constitute a precedent by which the destination of property of great aggregate amount and value would be determined. Also the Appeal, he said, raised a question of the gravest constitutional importance. There was no evidence whether Germany would, even if she were able, make effective reparation. The question amounted to no less than this—whether the appellant and other British subjects in the same cases were by this Order in Council deprived pro tanto of the rights acquired by British subjects by the 39th Article of Magna Charta. The other judgment was against an unfortunate Englishwoman who had married an ex-enemy alien between the date of the Armistice and the coming into force of Peace. Her property was seized according to the judgment of the Court. I venture to think that there has been a case made out, not only in another place, by the report to which I have referred, but by the judgment to which I have drawn attention which should merit the attention of the Board of Trade. I am going to suggest this; they have set up a Committee which is presided over by a very distinguished lawyer who commands the respect of everybody in this country. On that Committee are two gentleman also entitled to great respect. I would suggest that the terms of reference to this Committee might be enlarged. At present the limits referred to in the Warrant of Appointment are, as follows:
The Committee were authorised to recommend the release (1) to ex-enemy nationals now resident in the United Kingdom of property to the value of £1,000; and (2) to ex-enemy nationals formerly resident in the United Kingdom, but now resident elsewhere, of property of the value of £200. In addition to property the Committee were authorised to recom-
mend the release of income up to a reasonable amount.
Then later:
The Committee were authorised to recommend the release to the owner, in order that he might resume business, of the proceeds of a business wound-lip under the Treaty with the Enemy Acts up to the sum of £5,000, where the owner was before the War, and had since been permitted to remain resident in the United Kingdom, and where the Committee considered that it was desirable in the national interest.
I feel perfectly certain it was never contemplated at the time the Treaty was signed that gross hardships should accrue. I believe the Board of Trade have it in their power largely to ameliorate the hardships which have been proved over a certain period of time. I would suggest to the Board of Trade that they might very well, without injury to the national interest, relax the stringency of the orders which sequestrate all ex-enemy nationals' property whatever the circumstances or whatever the conditions of the persons. I feel sure that in doing this the Board of Trade will in no wise be affecting the significance of the Treaty; on the other hand they will be upholding the national dignity and honour in these matters.

Mr. MOSLEY: Those of us who came to the House this afternoon anticipating that the Prime Minister would favour us with a performance in his new, highly-successful, and increasingly familiar rôle of the Angel of Peace, were sadly disappointed. I can only ascribe the sudden change from last week to the absence of one of his most prominent supporters at the recent Free Church gathering. I refer to the Chief Secretary for Ireland, who was not in his place this afternoon to cheer on the sentiments of peace. At the luncheon party last week everything was so appropriate. The Prime Minister, Nonconformity, the Chief Secretary for Ireland—how beneficent a combination! How pregnant with all the noblest aspirations of humanity. All that was lacking in that idyllic picture was the robust figure of the Colonial Secretary. Possibly, however, it was felt that his virile presence might mar the newly-found harmony of reacting Nonconformity and repentant Black-and-Tanuary! But, oh! what a change of heart. The prodigal son of Nonconformity, after eating the fatted calf so
generously provided, has broken loose again, and has descended upon the House of Commons this afternoon, thundering about the danger of a German trade revival, conjuring up terrible visions of a Germany restored to prosperity, and Europe restored to peace, by which, in some mysterious fashion, the trade interests of this country are to be undermined! Possibly the right hon. Gentleman has considered that even in politics some things are too abnormal to be swallowed by the electorate. If we were some morning to open our morning paper and see a conspicuously displayed advertisement headed: "Prominent burglar requires job as policeman, as he has no further prospect of remunerative employment in his own profession," we should consider that such an advertisement was rather strange, but in polities these things happen constantly. Possibly the Prime Minister reflected in the interval but his sense of the incongruous has inspired him to reverse his former attitude.
We have listened to the right hon. Gentleman in some very remarkable conceptions this afternoon. Not only have we been informed that the restoration of our second best customer to the economic comity of Europe would be fatal to the trade interests of this country, but that the facing of realities and the realisation of the position of other countries must be detrimental to the interests of the taxpayers of this country. Is it really in the interests of the taxpayers of this country to hold on to paper assets, whilst surrendering, perhaps in perpetuity, or in comparative perpetuity, those great trading interests and of those foreign markets on which our prosperity depends? Surely we are in a position of one who has made a great mistake and who has committed his signature to a bond which he is called upon to honour. He tries in some way to escape the onerous and irksome obligation into which he has entered and finds he can only escape by paying for his mistake. We have put our signature to something from which we cannot escape, and it is only by substantial concessions that we can hope to extricate ourselves from our difficulties and resuscitate the trade of this country.
In his speech this afternoon the Prime Minister once again failed entirely to face the realities of the European situation. It is not a question of
haggling over comparatively small sums of money which are owing between Nations; it is a question of getting down to the real bed-rock of the economic situation. There are other factors in the situation. The right hon. Gentleman did not touch upon the question of disarmament. Who will deny that the armament question in Europe is, perhaps, the most potent factor in debarring America from participating in the solution of our difficulties? I agree entirely with what the hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) said when he emphasised the inter-relation of the questions which are in the European situation. It is a four-fold problem, a problem of guarantees of National safety upon which Disarmament is dependent, and the problem of the inter-Allied debt, upon which the reparation solution is dependent. Now, with all these questions outstanding, with no definite and concrete proposition from Europe itself, the Prime Minister tries to inveigle America into the European Madhouse by arguing it is not safe for her to remain outside. If only the right hon. Gentleman would face the realities of Europe and would try to get some agreement upon the European difficulties, contingent even, if he likes, upon American assistance—if he could get a European settlement and agreement, and then go to America with a concrete proposition for the solution of the problem in which her trade interests are as intimately bound up as our own, there might be some hope for escape from the difficulties in which we find ourselves.
It is really no good, however, merely sending out an invitation—for that is what it amounts to—to America to participate in the European situation which holds out not the faintest hope of solution. To come into Europe which is still spending something like five times what it did before the War on the maintenance of arms, and to give financial assistance to countries—and to one great country in particular—which is spending 45 per cent. of its substance on armaments, how can you expect any reasonable people not reared in a militarist tradition to participate in such a settlement? It is no good crying for help to other people until we have learnt to help ourselves. The right hon. Gentleman has never in the course of the last three years attempted to face
the fundamental difficulties of Europe. Let him, by substantial concessions in the matter of debts, purchase a reasonable solution of the reparation problem. Let him, by entering into, not a unilateral agreement, but a comprehensive agreement compatible with and in accord with the spirit of the covenant of the League of Nations, such as that recently engaging the attention of my Noble Friend the Member for Hitchin (Lord R. Cecil), secure a measure of disarmament based upon guarantees of safety. Then, when we have faced the four great inter-related questions and have settled them to the satisfaction of Europe, when we are in a position to put up a concrete proposition to America based upon European agreement, then we may expect a solution of this question, and the participation of America as partners in a business which appears to have some prospect of success. Until the right hon. Gentleman faces the European situation, and has secured agreement among European countries, I cannot see how any reasonable person can expect America to intervene on our behalf. I hope the right hon. Gentleman will persist in the policy of seeking first a European agreement, and then approaching America with a concrete suggestion.

Mr. GIDEON MURRAY: I am extremely sorry that there is no one on the front bench at the present moment representing either the Chancellor of the Exchequer or the Prime Minister. I see my hon. Friend the Parliamentary Secretary to the Board of Trade on the Treasury Bench, but I do not know what he has to with this Debate. I hope, however, that what transpires will be duly conveyed by the Under-Secretary to the Prime Minister and the Chancellor of the Exchequer. I have listened with the greatest interest to the historical account which the Chancellor of the Exchequer gave this afternoon of the whole position with regard to reparations in Europe. I think we are extremely indebted to him for that account, because through the maze of negotiations and conferences and committees which have taken place during the past three years, it has been impossible for the ordinary layman to follow exactly what has occurred.
That account was followed by a speech from the Prime Minister, who also added greatly to our information, but neither of these right hon. Gentlemen gave us any information with regard to that very important document, which has been published in the Press within the last few days, namely, the document which will be known in future as the Balfour Note. They were particularly silent about that despatch. In certain quarters of the House it was suggested that it meant one thing, and in other quarters it was suggested that it meant another thing. It reminded me of John Collier's problem pictures, beautiful in production, but uncertain in their object. Like John Collier, the Government this afternoon was very successful in concealing the secret of the picture which is drawn in the document. I, for one, am not at all satisfied that this was an opportune moment to issue such a note from the Foreign Office. There are several reasons why it should not have been issued at the present moment. First of all, I think that it will give encouragement to Germany once more to evade her just debts. Secondly, America is on the eve of the elections which will take place in November, and I think that it would have been more judicious to have awaited the result of those elections before the issuing of a document which practically, whatever may be said, demands from America that she shall permit us to cancel our debt to her.
What is the actual position now that that despatch has been issued. America, through the Chairman of the Finance Committee and certain other distinguished persons, has publicly stated that she cannot agree to any cancellation of the debt, and so we are exactly where we were yesterday or the clay before the Note was issued. In other words, we have to go to this Conference in London between the Prime Minister and Monsieur Poincaré with the object of arranging German reparations quite apart from what is contained in that Note. Therefore I believe that it ought certainly to have been delayed, whatever the advantages of its contents might have been at a later date.
I listened with interest to the Prime Minister's statement in which he informed us, on the one hand, how fairly he had
treated Germany, whilst, on the other hand, he described to us what he proposed to do at the Conference with M. Poincaré. Over and over again the Prime Minister at conferences has, in my opinion, given away the case of Great Britain, and I only hope that the words which he has spoken this afternoon, strong words which will have the sympathy of a great many people in this country, will be translated into action and not remain only words. The right hon. Gentleman informed us that there had been great difficulties in our negotiations with France. We are all aware that there have been great difficulties. Naturally difficulties occurred because our conditions are not altogether the same. I submit with all deference that the Prime Minister has not pursued the negotiations with France in a way likely to achieve success. He has gone to America, and to Germany, to seek his remedies instead of pursuing a definite line of action through France, and through France alone. The right hon. Gentleman has been to Genoa, San Remo, London and Paris, and almost every country in Europe has had its conference, and he has attempted there to come to an arrangement with France and Italy, whereas, if he had pursued those negotiations through the Foreign Offices of these respective countries, he would have been more likely to have achieved success. He has conducted these negotiations through multifarious conferences in a hole-and-corner atmosphere of intrigue and cheap journalism which has been the downfall of the Allies and Germany's opportunity. Germany has fooled us all the time and will go on fooling us unless we show her that we mean business. Now what has happened? She has never attempted to collect her available assets, she has printed unlimited paper money, she has never taxed herself commensurately with her capacity as we were told to-day in statistics given us by the Chancellor of the Exchequer; she has permitted her rich citizens and business firms to export all their available and transportable wealth, and, in the first instance, she depreciated her currency deliberately until now that which was intended to assist her to avoid payment has become a grave danger to her.
What is to be done? This afternoon we have listened to speech after speech from all quarters of the House in which the case of Germany has been described to us with every tenderness. We all know that the position at the present moment in Germany is a most difficult and dangerous one. It does not require the description given by the Chancellor of the Exchequer or by the hon. Member for Preston (Mr. T. Shaw), the latter of whom gave such a heartrending account of present conditions in Germany to bring home to us what that position is. It is perfectly true we must face that condition as we are told it is and the realities as we find them to be. What can be done? Obviously we are not going to help the position if we say to Germany, "Poor Germany, what a bad condition you are in. Now then, how much are we going to let you off?" That is not the way to get money out of a debtor, that is not the way in which hon. Members sitting on the benches opposite would act in business. No one would go in that way to a debtor if he wished to extract money from him. I think that the Prime Minister has been very culpable in the way in which he has conducted proceedings during the past three years, and I urge again my hope that he will translate into action the strong words he has spoken this afternoon.
How are you going to meet this position? If I may be permitted, I wish, with all respect, to outline what I believe to be the way of doing it. First of all, it has practically been arranged, I believe, that a moratorium shall take place. That is the one thing to be done. At the same time I would place in Germany a Receiver in Bankruptcy—a Debt Commission. I would transform the Committee of Guarantees, if they are a suitable body, into a Debt Commission and put it in Berlin with the object of controlling the finances of Germany for a fixed term of years. I would do what was done in Egypt over 30 years ago, when Lord Cromer, then Sir Evelyn Baring, went there with a Debt Commission and took charge of the Egyptian finances. It would be the duty of the Debt Commission to collect all available evidence with a view to fixing what Germany can pay, and that Debt Commission should take into account, not only all the revenue receipts of the country, its Income Tax and its
Customs revenue, but also the wealth which has been exported from Germany. In fact it should take into account every class of revenue which could come within the purview of such a Commission. If that were done Germany would then be in the same position as Egypt was in the eighties. It would be possible for that Debt Commission to approach America or any other country that might be able to contribute to an international loan. With the information at their disposal and with the knowledge that the Debt Commission was sitting in control of her finances, it might be possible to get for Germany that credit for a loan which she is unable to secure to-day.
I want to make one suggestion to America, if I may do so. She finds herself unable at the present moment, perhaps she may find herself unable indefinitely, to cancel the debt of Great Britain to herself. Apart from any question of what we are prepared to cancel, she has stored up in her banks a vast amount of gold, aggregating, I believe, £280,000,000, of which only from £50,000,000 to £80,000,000 are of any use to her from the point of view of her own commerce and credit. I would suggest to America that it might alleviate conditions in Europe—because we live under a gold standard, and so long as the gold standard is there, gold is useful—if she would lend on interest to Germany for distribution as reparations, say, £200,000,000 of that gold now lying in her banks and earning absolutely no dividend or interest. In that way that gold could be distributed to Europe once more, and would help to create the credit which is largely lacking and which makes it so difficult to sell or buy goods.
I do not believe that any settlement should be made at this coming Conference, or at any Conference, which provides for cancellation of the Allied War Debts to Great Britain, unless the United States cancel our debts to them. Further, there should be no cancellation of German reparations until Germany has agreed, and satisfactory arrangements have been made by her, to pay France and Belgium in full for the damage done to their devastated areas. These are two most important points, and I believe that the view I have expressed upon them will receive the sup-
port of the mass of the opinion of this country. I think they should receive every consideration in all negotiations that may take place in the future.

Mr. HASLAM: As I have just come back from a three weeks' tour in Germany, during which I have visited some of the principal towns and commercial centres, such as Cologne, Hamburg, Berlin, and Düsseldorf, I hope that I have some information which may he acceptable to Members of this House who have not had the opportunity of visiting Germany lately. On all hands I found an appearance of prosperity. One thing that I noticed particularly was the condition of the children in Germany. I found them to be clean and well fed, and apparently in good health. I found also that building was active, apparently, throughout the country. New factories were being built, and extensions of existing factories, and this was to be seen in all parts. There was no apparent unemployment, and I saw nothing like destitution. I found that taxation has been very low in Germany. Workmen's wages, too, have been very low, and those low wages have been helped by subsidies paid by the State. At Hamburg I found great shipbuilding activity, and all the shipping berths were, apparently, occupied. I was told also that the amount of clearance tonnage through the harbour was almost up to the pre-War level. In Berlin, also, I saw signs of great activity. I found that a new underground electric railway was under construction, that the main station was being rebuilt, and that banks were rebuilding and enlarging their premises.
I have come to the conclusion—a conclusion, by the way, to which I came 18 months or more ago—that the most important point that requires to be dealt with is the stabilisation of the currency. I found the effects of depreciation of currency to be most marked. I will give an instance. A man told me that he bought two identical suits of clothes within a week, and, while one of them cost 7,000 marks, the other, bought a week afterwards, cost 11,000 marks. That shows the effect of the instability of the exchange. I also found that things were very cheap in the shops. For instance, I could buy chocolates of the best quality, containing 65 per cent. of the cocoa bean, for the equivalent of
8d. per lb. Were the Germans to allow the export of these goods, they could, at these exchange rates, be brought over to this country and sold at a profit of 100 per cent. That, again, shows the great difficulty which the depreciation of the mark has introduced into business considerations. The next point that is most important is that their National Debt is virtually extinguished. The interest is not worth a fiftieth part of its former value, and to all who hold State securities, this represents an Income Tax which absorbs the whole income, that is to say, an Income Tax of nearly 20s. in the £ in the case of the unfortunate loan holders. The same, of course, holds good in the case of those who lend money to business undertakings, but those who are loanholders have practically no interest at all. That, on the other hand, helps the business man, and helps towards the encouragement of enterprise in Germany. The State's yield from taxation constantly goes down, on account of the depreciation of the currency, because, as the value of the mark goes down, the taxation being, as a rule, fixed, the amount of value received becomes less and less. I found, also, that the State railways were charging fares very much below their real value. The passenger traffic figures, for instance, have only gone up 15 times, while the internal value of the mark has probably depreciated at least 70 times. To give an instance, I may say that the journey from Hamburg to Berlin, a distance of about 200 miles, cost me about 5s. first class, or about ¼d. a mile, while the third class fare is less than half that. This represents an increase of about 19 times on the first class fares, and 15 times on the third class, over pre-War rates, in paper marks, but in real value they ought to have been advanced about 70 times. The State railways have thus shown very heavy losses, and, indeed, for 1921 the total deficit on these railways was about £40,000,000.
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It will thus be seen that the people of Germany have the advantage of these low taxes, which, in addition, have advanced the interests of all business transactions. The amount of tax actually collected or paid is very low. The postal rates, also, are about one-fourth of what ought to be charged if they paid anything like the price that should be paid according to the depreciation of the mark. All this
helps industry. On the other hand, the internal wealth of Germany is gradually but steadily increasing, but I feel sure that Germany must still have time to recover.
I want now to show the other side of the picture. Germany has paid in respect of the London Resolutions, in cash and in kind, £500,000,000, and, in the form of the State property ceded, she has also had to pay £100,000,000 in addition. The total claim made by the Allies in respect of reparations, apart from the clearing house of enemy debts, was estimated to be £6,600,000,000, which would be about three years' total income of the German people before the War. I maintain that it is totally impossible for the Germans to pay that amount. After the War, Germany was financially and morally exhausted. She handed over 15,000,000 of population and consequently one-fifth of her sources of revenue, while by transference of territory she had to part with 24 per cent. of her coal producing and 79 per cent, of her iron ore producing resources. Her merchant tonnage, which before the War was 5,000,000 tons, has only been restored to the extent of 2,000,000 tons. By the Treaty terms she had to deliver to the Allies 5,000 locomotives, 150,000 trucks, and 730,000 head of livestock. In West Prussia she has lost her richest area for the growing of rye, beet sugar and potatoes. The production of these foodstuffs, for 1921, showed a decrease of about 40 per cent., which was much greater proportionately, of course, to her population, owing to the transference of German territory.
Germany, again, has had to form a new Constitution upon a republican democratic model, and she has had to resist the monarchist and militarist section of the people, which is a matter of great difficulty for her. We should endeavour to strengthen the young German Republic in every way. The German people, as a whole, are honestly opposed to the old Junker militarist section, and need our sympathy and support. I heard a working man say in the street, referring to the occupation, "We have to thank Bismarck for this," and that is the sentiment of most of the people. In conclusion, I should like once more to refer to the essential necessity for restoring stability to the currency. All efforts should be directed towards that end. The first necessity is the restoration of German
credit, as the best means of causing the tendency towards appreciation of the mark. Germany is undoubtedly increasing her internal wealth, but unless she is able to export much more than she imports it must be impossible for her to buy foreign credits with which to pay reparation charges. In order to help her to meet her obligations a moratorium to enable her recovery should be agreed upon, or a sufficient period for the purpose. If possible, an agreement should be come to with the German Government, and a large reduction made in the amount of reparations, the dates and the amounts of payments being fixed. Means will have to be taken to enable France to tide over her present financial difficulties. Whether America will come to the aid to save Europe from disaster is a question which must be left to her own conscience and common sense. We were partners during the time of destruction. Are we to be partners in endeavouring to restore prosperity to the devastated nations? America has the gold. Is she willing to help? I am convinced that the French and German Republics will gain by goodwill and by laying aside old animosities. If they come to a voluntary agreement, as time goes on, with Germany's fulfilment of her obligations, I believe the necessity of exercising force would become less. A method might be arranged for stabilising the German currency by a reduction in the monthly payments in gold at a certain percentage for every 100 points of the approach of the mark towards parity. Thus Germany's interest in the appreciation of the mark would become a solid and a tangible one. A new German par value of the mark should be aimed at, and in the course of time stabilisation would be effected. The formation of an international financial authority, to establish ways and means by which currency stability should be promoted, would in itself go a long way towards the restoration of confidence and towards the attainment of European prosperity.

IRELAND.

Mr. GWYNNE: We have listened now for over five hours to a very interesting Debate on a very important question. I should like to raise another question, also of great importance, namely, the question of Ireland. As Parliament rises to-
morrow for three months, I think it is not unreasonable for us to ask the Government to give us some information as to what arrangements they have made, and what their policy is, in regard to that country. Some of us are in doubt even now as to whether the Government have any fixed policy in regard to Ireland. I saw in yesterday's papers a letter from the Colonial Secretary, in answer to one by Lord Salisbury, in which he displayed an unusual amount of ignorance for him. The main burden of his letter really was, "I do not know, I cannot tell." He seems to have adopted instead of a wait-and-see policy the formula of "I do not know." He says:
I cannot tell at the present time what the result of the fighting will be or when the result will become manifest. I cannot tell whether an outbreak of murder will follow the close of the military operations. I cannot tell whether disorder is to be broken up and will be arrested before Ireland is plunged into bankruptcy.
Of course, he cannot tell, because his information, as far as I know, only comes from the Provisional Government, and they only tell him what they want to. That is the position we are faced with at present. If we look for guidance from those leaders of the Government who formerly belonged to the Conservative party, we are equally in the dark. I read that the Lord Chancellor last week boasted that the Unionist members of the Government had successfully maintained during the whole time every fundamental principle the Unionist party stood for. I am surprised that the Lord Chancellor should make that assertion. It was not a very wise assertion, because it was not long ago that his colleague, the Leader of the noose, admitted that there had been a grave departure from the principles which the Unionist party stood for in regard to Ireland. I should like to ask the Colonial Secretary, as he has had experience of all the parties of the State—Coalition, Liberal, Radical and Conservative—to tell us which Minister he thinks is right, because with all the versatility of the Colonial Secretary you cannot depart from a principle and at the same time maintain it.
But the Lord Chancellor really expressed the most amazing optimism in regard to Ireland. I dare say we must discount some of it on account of the hospitable surroundings in which he found himself. We learn from the Press that
dinner was laid out in two huge marquees and the guests were entertained in a lavish way. I believe the programme said, "Ye old beer of Merrie. England will flow." After this banquet had taken place, the Lord Chancellor addressed the, meeting and said, with regard to Ireland:
It was perhaps too soon now to claim complete success, although evidences were multiplying daily that the Imperial Government was right in the matter.
I do not think even the Colonial Secretary will suggest that there is any evidence so far that complete success is soon likely to be achieved. He went on to say:
The critics of the Government must have looked particularly foolish to-day when they read the news published from Ireland with reference to the negotiations for a truce.
If anyone has looked foolish over the Irish question, surely it is the Lord Chancellor himself. He it is who says one thing one day and another another, without in any way explaining the reasons for his change of front. He stated in another place yesterday that he for one refused to send out Englishmen to fight in Ireland, and he refused to spend English money in such a contest. Then why did he say last year words to the effect that our last shilling and our last drop of blood would be spent in exterminating these murderers in Ireland? Everyone has a right to change his mind but men in great positions, if they are going to say one thing one day and another the next week, ought at any rate to have the honesty to confess that they have changed their mind and not pretend by bouncing that they have maintained the policy they have contended for all along.
The Lord Chancellor's public utterances have shown a callous indifference to the sufferings of those loyalists in Ireland whom not long ago he publicly said he was willing to risk his life to defend. I cannot hope that the Lord Chancellor will go to Ireland and satisfy himself as to the true state of affairs there, but I suggest that both he and the Colonial Secretary might get some information and some insight into the real situation if they would go for a few mornings to a building, not many hundred yards from here, where a voluntary association is trying to give some relief to these unfortunate refugees who come from Ireland. There they will see men, women and children penniless, homeless, broken through no fault of their own, except that
they have been loyal, coming there, turned out of everything, with no prospects for the, future, and asking merely for enough money to keep them from starvation at the present time. It is no use going through the list of terrible outrages to which these people have been subjected, but I will tell the Colonial Secretary of one case which came to my notice the other day, of a man and his sister. The man is about 60 years of age, and he came over in a broken condition and penniless. He had been a small farmer in Ireland. His story, and it appeared to be perfectly accurate, was that ho had been ordered to give up his holding and to hand over his possessions, and because he had not done so willingly, and did not quit at the hour that had been ordered, his furniture was taken out of the house and burnt in front of him. Then his outhouse, containing 18 chickens, was set on fire, and the chickens were burnt alive. His fellow Irishmen were not satisfied with that. In order to punish him they poured petrol on his dog, and set fire to it. He said that that hurt him perhaps more than anything else. He came over here in a broken condition, and the association endeavoured to find him a home. They were able to do so, but it was too late. Information came that the man had gone mad, and had to be sent to an asylum.
These are the sort of things that are going on, and yet the Lord Chancellor says:
We cannot claim complete success, but that we have every hope that things are really brightening out and that our policy is the right one.
I could go on for an hour telling stories of this kind. Surely, it cannot he contended that all is well there at the present time. To do him justice, I do not think that the Colonial Secretary claims that all is well there at the present time. In the last Debate he admitted that if things did not alter soon the Government, would have to reconsider their position, and that now that the Provisional Government was greatly strengthened, it was its duty to give effect to the Treaty in the letter and in the spirit. He said:
The time has come when it is not unfair, not premature and not impatient for us to make to this strengthened Government and this new Irish Parliament"—
which, by the way, has not met—
a request, in express terms, that this sort of thing must come to an end. If it does not come to an end.… and a very
speedy end, then it is my duty to say, on behalf of His Majesty's Government, that we shall regard the Treaty as having been formally violated, and that we shall take no further steps to carry out or to legalise its further stages."—[OFFICIAL REPORT, 26th June, 1922; col. 1712, Vol. 155.]
In view of the fact that the House adjourns to-morrow, it is not unreasonable for us to ask the Colonial Secretary if the Government have come to any conclusion. I do not ask him to tell us the exact arrangements, but can he satisfy us that some definite time limit has been fixed by which this state of affairs must be brought to an end? The Provisional Government themselves mentioned a time when they thought they could restore law and order. On the 18th May last a communication was sent by the Secretary of the Provisional Government, in which he said:
The Provisional Government anticipates that normal conditions will be re-established in Ireland in the course of the next two months, and it will then be possible for these people to return in safety to their homes.
Two months have elapsed, and far from returning in safety to their homes refugees are at the present time still flowing over here, and many more would come if they got the chance. In that connection, may I ask the Colonial Secretary if he can take some steps to provide for the wives of soldiers who were stationed in Ireland and who have now been brought back, or who will come over here shortly? I have had a letter from a man in the Army, written in the last two or three days, saying that his regiment has been brought back here, but that he had been unable, through lack of accommodation, to bring his wife and five children with him. They are over there now. The people living next door to this man's wife have been threatened because they happened to have been in the English Army, and the man is in great distress lest his wife is placed in the same position. I would ask the Colonial Secretary if he can communicate with the War Office and see if these men who have been brought back and who are still in the Army can be given facilities in some way, and that even if there is not room in the married quarters some other accommodation might be found so that their wives and families might be brought back here without delay.
The Colonial Secretary in his letter to Lord Salisbury stated that one of the reasons for his being unable to press the Provisional Government further at the present time was that they were actively engaged in putting down rebels by force of arms. I suggest to him that this activity on the part of the Provisional Government consists not so much in putting down one lot of rebels bat in destroying the property of the loyalists. That is the real effective display which has taken place during the recent fighting. A few people have been killed, but the real damage that has been done has been clone to the property of the loyalists. It cannot be merely a coincidence that Sinn Feiners' houses in Dublin or Shin Feiners' farms in the country are spared and that it is always the property of the loyalists, and especially the loyal Protestants, which comes in for destruction. If the Provisional Government are really seriously engaged in stamping out the irregular, why is it that Mr. de Valera, who was openly walking about the streets of Dublin for the first four days of the fighting there, after having issued a poster admitting that, he was responsible for the irregulars, was not captured or arrested, if Mr. Collins and his Government really mean it? Why was it that Father Dominic, the man who was sentenced for two years for complicity in the murder of officers, and who was captured after the Four Courts were blown up, was instantly released, and given a pass through the Free State lines? Why is it that all the men who were captured smuggling and looting are treated as military prisoners, and why has not one of them been brought to justice? Finally, if the right hon. Gentleman is correct in saying that Mr. Michael Collins is actively engaged in putting down rebels, why has nothing been done in regard to Rory O'Connor, who was responsible for the occupation of the Four Courts, and for The burning of them, and also for the fact that dozens of people throughout the country have been murdered on his orders? He was taken prisoner, but we have heard not one rumour that he has ever been tried or punished. Surely an example must be made of the leaders at the earliest possible moment, if this matter is really seriously being taken in hand. Then the Colonial Secretary goes on to say:
I believe, however, that the Provisional Government are doing their best to pre-
serve the country in their new-found liberties.
I do not quite know what those newfound liberties are at the present time. The liberties the Irish enjoyed under the British Government were certainly much more pleasant than those they are now enjoying. Is the Colonial Secretary really satisfied with the endeavours of the Provisional Government to punish crime? Is he satisfied that that Government are doing their best to protect the loyalists, and are really getting order to come out of chaos? I do not know whether the right hon. Gentleman is aware of the Spanish proverb, which says:
Let the miracle be wrought though it be by the devil.
It seems to me that the right hon. Gentleman is sitting still, hoping that some miracle will be wrought, even though it be wrought by the former murder gang in Dublin.
There is another question which I wish to put to the Colonial Secretary. It is with regard to this large national army, which has been raised by the Provisional Government. It was formed of recruits—I will read the Proclamation—
Recruits are now being taken from the Volunteer Reserve, in the first place, from the men who have already served in the Irish Volunteers.
The Irish Volunteers, as we all know, are the body which originally organized the rebellion in the interests of Germany in 1916. Therefore, this National Army is formed, in the first instance, of those men who formerly were hostile in the most extreme degree to this country. The Proclamation goes on to say:
On the completion of the six months' service, the recruits will return to their civil occupation, being allowed to retain their uniform, their arms, and their kit.
Is that done with the consent of the right hon. Gentleman? Can he tell us of any other instance in which men disbanded from the Army have been allowed to retain their arms, uniform and kit?

The SECRETARY of STATE for the COLONIES (Mr. Churchill): That is the Proclamation of a commandant in one part of the country. It does not represent the policy of the Free State Government.

Mr. GWYNNE: Has that been totally repudiated by the Free State Government?

Mr. CHURCHILL: Certainly I understand it has been declared not to be the policy of the Government.

Mr. GWYNNE: Will the right hon. Gentleman tell us how it has been so declared? At the present time, I do not quite see under what authority Ireland is being governed. There is this dictatorship of Mr. Collins. The Irish Parliament has never been called together. Under what authority are these Proclamations made? There is nothing to prevent the Irish Parliament in Dublin repudiating these Proclamations or upsetting any orders that may be issued and any bargains that may be entered into. It is a most extraordinary thing. Here is a Parliament claiming to be elected by the people, which is not allowed to function. It seems to me that the whole proceeding is illegal. I would ask the Colonial Secretary what would happen in this country if this Parliament were dissolved and another one were elected, and if Ministers governed while refusing to call it together?

Sir F. BANBURY: They have done it already with this subservient Parliament.

Mr. GWYNNE: I do not know if it is a violation of the Treaty—I think it is—for Mr. Collins and his colleagues to arm this vast body of men who have been notoriously guilty of sedition in treating with foreign Powers in the past, and who are quite without discipline. These men are armed and are going about in uniform with apparently no definite arrangement as to when they shall be disbanded. I would ask the right hon. Gentleman whether he has any assurance from the Provisional Goverenment that when the fighting is over the arms given out to the Free Staters will not be used against this country or against Ulster? I would also ask whether there is going to be any time limit, during which Mr. Griffith and Mr. Michael Collins can continue to reign, before calling together the Irish Parliament? Have they been given one month or two or three months, and when we return here in November shall we find that that Parliament has not even then been called together? I would also ask whether any time limit is to be given to the Provisional Government in which they shall restore law and order and give some feeling of security to the loyalists in Ireland? Finally, and this
is the most important thing of all, what arrangements are the Government making to enable loyalists to get away from Ireland? After all, the Government say now that they are willing to do all they can to assist the loyalists to get away. Do no forget, however, that if it had, not been for pressure in this House from a very small number of hon. Members, the consideration shown to the loyalists would have been very scanty. Now that the House is adjourning it is a very unfortunate thing for these loyalists in Ireland that there will be very little chance of their grievances being aired in the Press, and no chance of them being aired in this House for the next three months. Grave responsibility rests upon the Government to see that something is done speedily, and upon us to-night to see that before this Bill is passed some definite assurance is given by the Government that they really intend to give these people facilities to get away; that they are going to show the Provisional Government that they intend to enforce the terms of the Treaty forthwith; and that they are not going to allow it to be constantly broken and loyalists plundered and murdered without any punishment being meted out to the offenders.

Sir JOHN BUTCHER: No apology, I conceive, is required from us for drawing attention to-night to the position of things in Ireland. We are only discharging our paramount duty, as Members of the British Parliament, in doing all in our power to safeguard the interests of our fellow-sujects in Ireland. For over three months from this time the Imperial Government will have complete control of affairs in Ireland, so far as they have not abandoned them to this new and strange Government. They will have that control, free from any Parliamentary instruction and from the exercise of that control which has proved in the past so essential and so effective. Therefore I strongly support the claim of my hon. Friend the Member for Eastbourne (Mr. Gwynne) that the Colonial Secretary to-night should give us some indication of the policy and intentions of the Government during the time between this moment and when Parliament re-assembles. May I also ask the right hon. Gentleman whether, notwith-
standing those gloomy vaticinations in which he indulged yesterday, he can give some hope and encouragement to-night to those loyal fellow-subjcets of ours in Ireland who have suffered so cruelly during the past year or more.
Few people in this country realise the exact position in Ireland to-day. I doubt whether many Members of this House realise it. I am not using the language of exaggeration when I say that at the present moment in Southern Ireland there is less protection for loyal British subjects than in any other part of the civilised world. There is civil war raging, leaving ruin and desolation in its trail. Public buildings throughout the country are being burned. In Dublin itself three of the finest buildings, including the Four Courts, with their priceless treasures, have already been burned to the ground, and in the provinces you see, day by day, police barracks, gaols, military barracks and courts of justice destroyed by fire. And not only is public property being destroyed, property which was erected at enormous cost to this country for the purpose of creating civilisation in Ireland, but private property also suffers. Railway stations and signal cabins are burned and bridges blown up. Only a short time ago the great railway bridge at Portumna, in the County Galway, which cost £100,000, was blown up. Private houses, great and small, factories, and shops are looted and burned.
Wherever this war goes, or where the war has not yet reached, this process of destruction is going on. I do not want to draw too gloomy or unfair a picture, but if this process goes on, Ireland will be reduced to a position of primeval barbarism. What really concerns me more than the destruction of the buildings, which, after all, can be replaced if anyone has money to pay for them, is the position of the Loyalists in Southern Ireland. There are some cynical observers who say, "After all, what does it matter what goes on in Southern Ireland? Let these Irishmen destroy each other's property, and murder each other if they choose." I do not share that sentiment. Least of all do I share it when I remember that there are some 300,000 or 400,000 loyal subjects of the King in Ireland, who are being plundered, and sometimes murdered. What is the animating motive behind all this outrage?
One motive which governs the actions of these rebels is vengeance, vengeance primarily upon those who serve the Crown, and the more faithfully they serve it, the greater the vengeance they incur. But there is also vengeance in a hardly less degree on all who have been loyal to the British connection. Take the case of the Royal Irish Constabulary. Since the troops 34, or more, members of the Royal Irish Constabulary have been murdered.

Mr. CHURCHILL.: And how many during the last three months?

Sir J. BUTCHER: I cannot tell. I am glad that the right hon. Gentleman asks that question. Neither he nor know how many. I will give one instance, which never even came to the notice of the Chief Secretary. I got to know it because someone wrote to me about it within the last two months. It is the case of an unfortunate retired member of the Royal Irish Constabulary, who was savagely murdered in the presence of his wife in a Southern county. I will give the right hon. Gentleman the name and the place. I have already given it to the Chief Secretary. It never got into the papers. It did not even get to the notice of the Chief Secretary. I told him about it and he most promptly granted relief to the widow. I am glad that the Colonial Secretary asked the question, because, owing to the silence of the papers and the absence of information from Southern Ireland, and the rigorous censorship exercised by the Provisional Government on all news that comes from Ireland, neither he nor the public of this country knows how many of these men have been murdered altogether.
We know of some 34 men who have been murdered since the truce. We know that 2,000 ex-members of the Royal Irish Constabulary within the last few months have been driven from their little homes, in which they hoped to spend the last few remaining years of their life. They are now refugees in this country, and, were it not that the Chief Secretary has, owing, I think, in some measure, to pressure and, no doubt, in large measure, to his own desires, made some provision for these men, they would be starving outcasts in this country, unable to live. And then the members of His Majesty's forces are also affected, though one would
have thought that these men would have respected the British uniform. Since the truce 20 British soldiers in Ireland have been murdered, simply because they wore the uniform of the King. We have not forgotten that terrible case of the murder of three officers and a soldier, near Macroom, who were carried off to some unknown place and hanged, and for weeks, perhaps for months, His Majesty's Government was not able to tell us their fate.
If that is the case with regard to servants of the Crown are civilians in a much better position? There are victims of every class, high and low, rich and poor, whose houses have been burned, whose land has been seized, and whose property has been robbed, while they themselves, in some cases, have been murdered, and in other eases have been told that, unless they cleared out of their home in 12 or 24 hours, they would be killed. And they have been driven out of their homes, and are at this moment in this country, refugees from Ireland of every class, driven out, defenceless, abandoned, in many cases in a condition of destitution, from which they are being relieved only owing to certain Committees that have been set up in this country to keep them from starvation. If I had time I could give many harrowing details of the cases of outrage, even of murders, that have come to my own notice. I do not desire to do so beyond saying this. The Secretary for the Colonies asked how many of these murders had been committed in recent times.

Mr. CHURCHILL: I asked how many of the 34 had been committed during the last three months.

Sir J. BUTCHER: I hope I have said enough to convince the Secretary for the Colonies as to what the Royal Irish Constabulary have suffered. I am dealing now with civilians. Let me give him one case of a civilian named Edmunds, a highly respected officer of the Congested Districts Board in Ireland. He was murdered in County Galway. For what reason? Because he had some connection with this country. Take another case. Perhaps the right hon. Gentleman will remember that only last month a number of Protestant farmers were massacred in County Donegal. It was admitted in this House by himself or by one of his
colleagues. No reason can be assigned for it except that they were Protestants and were loyal. There was an extraordinary outrage only the other day in County Galway. It was the case of the Protestant orphanage established about 70 years ago for the purpose of supporting poor boys and girls of the Protestant religion. In the orphanage there were 33 boys and 25 girls. The place was wrecked by marauding ruffians. Some of the boys escaped at the peril of their lives. Boys and girls were brought over to England in a destroyer, and they are now refugees from their country, and are maintained by the charity of the Church Army or some other benevolent institution.

Mr. MALONE: On a point of Order. I have searched the Appropriation Bill, and have looked through the rulings that you, Mr. Speaker, in your wisdom have given on many occasions during the last 12 months in regard to interference in Southern Ireland, about which this House has passed legislation. Are we in order in discussing what is going on in Southern Ireland now? These outrages are not within our jurisdiction, and no money in the Appropriation Bill is affected.

Sir F. BANBURY: The salary of the Chief Secretary for Ireland is included in the Bill.

Sir J. BUTCHER: The Chief Secretary has already declared that if this campaign of outrage and murder goes on, the British Government will have to take steps to perform their primary duty of repressing it. I ask the right hon. Gentleman whether the time has not nearly come for the British Government to discharge their duty in maintaining order?

Mr. SPEAKER: I had better answer the question which has been put to me. At Question Time I have frequently refused questions dealing solely with matters for which the Provisional Government is responsible, but when we conic: to an occasion like the present, I think it is legitimate to ask how far the Treaty is being carried out, and also to call for a general statement from the Secretary of State for the Colonies, who is now responsible for the policy that was settled by this House in the Statute passed in March last.

Sir J. BUTCHER: I did not intend to refer to any more of these outrages. I will conclude my statement as to the wrecking of the Protestant orphanage. Some of the men who went to the orphanage and looted and burned it were asked, "Why is this being done; what grievance have you against these poor orphan boys and girls?" The answer was significant. They said, "The reason is that the boys are being taught loyalty to England, and the orphanage sent many of its boys to the Great War." Perhaps that will throw some light on some of these outrages. In the circumstances the people of this country, and certainly we in Parliament, are entitled to ask, how long is this reign of terror to go on in Ireland? Is it to go on for ever? Is there to be no check? Are we never to reassert our paramount duty of protecting the lives and the property of our fellow subjects? I will go for an answer to the Lord Chancellor of Great Britain. He was challenged upon this subject in the House of Lords the other day. My hon. Friend has already quoted some of his words on other occasions, and they throw a light on some of those remarkable characteristics which distinguish him. May I quote what he said in what I am bound to describe as a cynical and callous speech in another place?

Mr. SPEAKER: The hon. and learned Member is not entitled to make a reply to a speech in the other House, certainly not to make a personal attack on a Member of the other House. He is entitled only to refer to a statement in the other House as far as it is a material statement on the policy for which a Minister here is responsible.

Sir J. BUTCHER: I am much obliged. I did not intend to infringe any ruling. The only thing I wished to refer to was the advice given as to the mode in which these difficulties might be overcome.

Mr. SPEAKER: That is quite right, but the hon. Member must not use adjectives about a Member of the other House.

Sir J. BUTCHER: I dare say adjectives can be supplied without my suggesting them. I will not suggest any. The advice given by the Lord Chancellor to the loyalists in Ireland was this:
They are to keep stout hearts and cool heads.
It may be easy in England for some, people, especially those who do not realise what has gone on in Ireland, to keep stout hearts and cool heads, but I ask, how is it possible for men in Ireland, defenceless, abandoned by England, handed over to a Government which cannot give them a vestige of protection—how is it possible for them to keep stout hearts and cool heads, and to go on as if this were merely the normal course of the administration of a civilised Government? I am glad to think that the Secretary of State for the Colonies does not adopt that attitude of mind. He gave what appeared to me to be a far truer picture of what can be done by loyalists or by Members of this House. He said:
I should not be dealing honestly and fairly with that subject if I left in the minds of this House the impression that all that is required it patience and composure.
I thank the right hon. Gentleman for that statement. There has been nearly enough patience. There has been a good deal too much, composure. The right hon. Gentleman went on to say that mere paper affirmations, however important, if unaccompanied by effective effort to bring them into action, would not be sufficient, Then I call the right hon. Gentleman's attention to these admirable words of his own—
Mere denunciations of murder, however heartfelt, unaccompanied by the apprehension of a single murderer, cannot be accepted."—[OFFICIAL REPORT, 26th June, 1922; col. 1711, Vol. 155.]
I ask the Colonial Secretary, has a single murderer been apprehended by the Free State Government? Has a single murderer been executed by the Free State Government? They have been in power now for a considerable time. They have been furnished by the Colonial Secretary with arms and ammunition, motor cars and aeroplanes. A good many men have been captured, but has a single murderer been executed? Has a single man guilty of outrages, such as I have described, been brought to justice? If it be so, I have not heard of it, and perhaps the Colonial Secretary will tell us whether he has heard of it. If the Colonial Secretary is able to give any words of encouragement to these poor Loyalists in Ireland; if he is able to give them any ray of hope that things are really improving and that this orgy of Outrage and inhumanity is likely to cease,
it would be a great encouragement to them and would, I believe, be acceptable to every Member of the House. I hope he will be able to tell us, that. he honestly believes this thing is coming to an end, that he sees signs that the Provisional Government are really doing what they have been put in power to do, namely, to govern as a civilised Government, and to give that protection which we trusted them to give to our subjects in Ireland. The right hon. Gentleman, in the course of that speech from which my hon. Friend the Member for Eastbourne (Mr. R. Gwynne) quoted, said if the present state of things in Ireland was not brought to a very speedy end, then it would be necessary for this Government to take what steps might be necessary to safeguard the interests and the rights entrusted to their care. I therefore ask the right hon. Gentleman to make a clear statement of his policy and his intention. Seeing that up to the present, at any rate, there has been little, if any, improvement in the disastrous condition into which Ireland has fallen, will he tell the Provisional Government definitely and finally that they must restore order in Ireland and give the elementary right of protection to our loyal subjects? Will he tell them, further, that if they cannot or will not perform this elementary duty, if they cannot, to use his own words, bring the present state of affairs to a speedy end, then it will be our duty—again using his own words—to take steps to safeguard the interests entrusted to our care, and thereby fulfil the sacred and elementary obligation which falls upon every civilised Government.

Sir F. BANBURY: The right hon. Gentleman the Colonial Secretary asked the hon. and learned Member for York (Sir J. Butcher) whether he could give any instances of murders within the last three months.

Mr. CHURCHILL: No, I did not. The hon. and learned Member for York mentioned a figure of 34 members of the Royal Irish Constabulary murdered since the Treaty, and I asked him how many of those 34 murders had taken place within the last three months.

Sir F, BANBURY: I understood the right hon. Gentleman to ask how many murders had taken place within the last three months; and I understand now that
he asked how many murders of Members of the Royal Irish Constabulary had taken place in that time.

Mr. CHURCHILL: How many of the 34 mentioned by the hon. and learned Member for York.

10.0 P.M.

Sir F. BANBURY: I do not think that very much matters. The fact remains that since the so-called truce and the so-called Treaty there has been a large number of murders, and not a single person up to the present has been brought to justice for them. I think the Colonial Secretary is not altogether easy in his mind as to the situation in Ireland. I will do him the justice of saying that I do not believe he is at all happy when he sees these murders going on and no one brought to justice. The fact remains that not a single murderer has been hanged and not a, single person has been brought to justice for any of these various acts of violence. On the 14th December we had a speech from the Prime Minister, and the Front Bench was crowded with Unionist Members of the Government, who listened with admiration to the Prime Minister justifying the policy which they had always condemned. To-night, on the eve of the last day on which Parliament is going to sit before we adjourn until the 14th November, one would have thought the Prime Minister would be on that. bench, surrounded by his leading Unionist colleagues, to point out to us how wrong we were last December when we said the desertion of the old policy of the Unionist and Conservative party would lead to disaster. One would have thought he would be here to point out how wrong we were and how right he was. But what have we here? We have three hon. and right hon. Gentlemen, Members of the Radical party, who have always held that it was right to concede Home Rule to Ireland, and we have one single member of the Unionist party who has the courage to attend and hear his policy condemned, not by Members of Parliament but by actual events. Let me recall what the Prime Minister said on 14th December. It is very interesting to read some of these old speeches. The Prime Minister said:
I am convinced that the leaders of the majority in Ireland mean to do all in their power to make it not merely possible for the minority to live there, but as attrac-
tive as possible for them to continue their citizenship among them."—[OFFICIAL REPORT, 14th December, 1921; col. 42. Vol. 149.]
We have heard from the hon. Member for Eastbourne (Mr. R. Gwynne) how a man, because he was a loyalist and I think also a Protestant, was driven out of his home, and his dog had paraffin poured upon it and was set alight. Is that the way the Prime Minister considers the leaders of the majority in Ireland mean to do all in their power to make it not merely possible for the minority to live there, but as attractive as possible for them to continue their citizenship? We had last May a gentleman—I see the Colonial Secretary has left the Chamber. He does not like home truths. The Chief Secretary for Ireland, who remains, has, however, been so accustomed to finding all his assertions disproved, and all his prophecies wrong that he does not mind. He has a hardened nature, and because one or two statements have been proved to be wrong, and one or two facts quite illusory, they do not hurt him at all. The Colonial Secretary is not at present quite so hard, but if we go on much longer I am afraid he will come to the same condition. Now let me go on for the advantage and pleasure of my old Unionist colleague whom I still see on the Bench, the hon. and gallant Member for the Pollok Division of Glasgow (Lieut.-Colonel Sir J. Gilmour). How does he think the policy of the Prime Minister has been justified? He voted for that policy, I am sure under the impression that it was going to be successful, but what is he going to do now that that policy has been proved to he absolutely wrong?

Lieut.-Colonel Sir J. GILMOUR (Lord of the Treasury): indicated dissent.

Sir F. BANBURY: My hon. and gallant Friend shakes his head. Let me read what the Prime Minister said—
The prestige of Empire has been enormously enhanced by this Agreement. It has given the Empire a new strength."—[OFFICIAL REPORT, 14th December, 1921; col. 44, Vol. 149.]
Does my hon. and gallant Friend believe that the prestige of the Empire has been enhanced by the fact that we have established a Government which not only cannot maintain law and order, but is fast allowing all property to be destroyed in that part of His Majesty's
Dominions in which, unfortunately, it has control, and is allowing the lives of the citizens to be sacrificed by bands of roaming robbers, for they are nothing else, who go about seeking whom they may devour? Does my hon. and gallant Friend, who, I know, is a conscientious English gentleman—[HON. MEMBERS: "Scottish!"]—now say that he can justify the policy of the Prime Minister? I always like to read what the Prime Minister has to say. It is nearly always wrong. If you leave out the War, I cannot see that anything which the Prime Minister has ever said would happen, has happened. On the contrary, it is the reverse that always happens. The Prime Minister then said:
This brings new credit to the Empire, and it, brings new strength. It brings to our side a valiant comrade.
It brings to our side Michael Collins and a gang of thieves and murderers. He went on to say:
By this Agreement we win to our side a nation of deep-abiding and even passionate loyalties. … There are still dangers lurking in the mists. Whence will they come? From what quarter? Who knows? But when they do come, I feel glad to know that Ireland will be there by our side, and the old motto that 'England's danger is Ireland's opportunity' will have a new meaning. As in the case of the Dominions in 1914, our peril will be her danger, our leans will be her anxieties, our victories will be her joy."—[OFFICIAL, REPORT, 14th December, 1921; col. 49, Vol. 149.]
And on all that rubbish the right hon. Gentleman, who is conspicuous by his absence, obtained a majority for one of the most disgraceful Treaties that has ever disgraced any Prime Minister or any Government.

Lieut.-Colonel J. WARD: Really, I would like to know what the right hon. Member for the City of London (Sir F. Banbury) requires the Government to do in the situation in which we find ourselves to-day.

Sir F. BANBURY: I think the Government ought to confess their fault and their error, and reconquer Ireland.

Lieut.-Colonel WARD: I am certain that, there is not another Member, not even of the Die Hard party, who would publicly make that statement.

Lieut.-Colonel ARCHER-SHEE: Yes, certainly, I will. You will have to do it later on, anyhow.

Lieut.-Colonel WARD: For the moment I had not connected my hon. and gallant Friend with the Die Hard party on this question. Looking back over this discussion and these troublesome times, on this subject I took the attitude of both the right hon. Baronet and the hon. and gallant Member opposite in the early stages of this business. I would have fought Ireland. I would have gone to the extreme to maintain law and authority in Ireland, and I am certain that at that time it was the intention of the Government to do so, because, if it were not their intention, it would have been criminal to have started it. It would have been infinitely better to have made terms before they had begun to fight than to go on, admit failure, and try to make terms then, But I believe they intended to go on, and I certainly would have assisted them, as far as my vote and voice in this House were concerned, in maintaining that policy, and—I do not mind confessing—carrying it to its absolute, logical conclusion, but I am bound to confess that I watched events day after day. The hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel Guinness), and any number of Gentlemen who now belong to the Die Hard party, began at once to criticise the action of the Chief Secretary for Ireland, and I know for a positive fact that when it was coming to a critical issue, even the Unionists in the South of Ireland put the greatest obstacles in the way of the Government carrying that policy any further, until some kind of compromise was necessitated. You do not object to your real opponents fighting you. The policy of the Government at that time was opposed by the Labour men and by the "Wee Frees," but you take that for granted. It is their business to oppose.

Mr. T. SHAW: And then you come round.

Lieut.-Colonel WARD: Never mind about that. I hold the same opinion to-day, and I think the thing ought to have been carried to its logical conclusion, but, as I was saying, when you begin to find that those who are interested in the policy that you are putting into execution, those whose interests you believe you are defending by that policy, begin to attack you and to make it impossible for you to succeed, then naturally you are obliged to bow to the inevit-
able under circumstances like those. The Government were opposed. The most terrific opposition, the sort of opposition that you cannot get over, was that which came from those who had first of all suggested the policy to them. Let there be no error about that. You got into a condition when a compromise had to be made. I think that under the circumstances that prevailed, with the hostility of the Southern Unionists, led by Lord Midleton, to the continuance of that policy, the Government had no alternative but to do what they did. Now that the Treaty is made, and this House has sanctioned it and ratified it, and it has also been ratified by the other House, we may take it for granted that general Unionist opinion both in this House and the other House has, as it were, given sanction to the policy of the Government.
Now there is a party of extremists in Ireland who will not allow any reason to prevail, just the same as there is a party represented by my right hon. Friend the Member for the City of London (Sir F. Banbury) in this House. In Ireland you have the extremist, the single-minded man, the man who takes up a stand and sticks there, no matter what comes up against him, who never forgets anything, and who never remembers anything, the man in whose political mind there seems to be one idea, that he had better hold to that stiffly, because there is not room for another. You get those men, both at this end and in Ireland. You have got a great contest how between those who have made terms with the Government and those who still go out for an absolutely independent Republican Ireland, and the Government say that, under the circumstances of this internal turmoil in Ireland, they must render all the assistance they can to the party with whom they have made a contract, which has been sanctioned by this House. Are they not entitled to do so? They cannot be responsible for the inability at the moment of the Free State Government to maintain law and authority, but they at least have this in their favour, that, so far as the replies to questions in this House are concerned, one can see that, within reason, they are doing all that they can to maintain the Government which, by the Treaty, was set up in Ireland. In this transition period there naturally must be a considerable amount
of trouble, violence, and arson, and all things that naturally take place when law and authority are disputed by anybody in any country. That is inevitable under the circumstances. I think that the House and country would like to know whether the old Diehard party are of the opinion of the two hon. Gentlemen opposite, that what we ought to do is to scrap this Treaty, send an army and reconquer Ireland. I believe you would find not 10 per cent. of Britishers in favour of such a policy.

Lieut.-Colonel ARCHER-SHEE: The Treaty has been broken by the people who made it on the other side.

Lieut.-Colonel WARD: That the hon. and gallant Gentleman can prove by following me in the Debate. It is not necessary to interrupt me to make that statement. As far as circumstances have allowed, I believe that the Provisional Government have done their best to enforce and carry out that Treaty. As I say, I was a supporter of these gentlemen up to a point. I think it was a mistake for the Government to make terms with the enemy, but, once having done it, once having brought it up before this House and before another place, and received legislative sanction to the Act, it is simple stupidity to try to continue the controversy any longer. The thing to do is to try to make the best of it, not merely for Ireland but for your own country.

Mr. CHURCHILL: More than six weeks have passed since I last spoke on Irish affairs in the House of Commons. No one can complain that on this last evening but one my two hon. Friends who have spoken on this topic, should wish to bring the matter before the House. We are going to separate after a Session in which Irish affairs have provided drama, not unmixed with tragedy. They have occupied many of our Debates. We have had many disappointments, unceasing anxiety, much bewilderment, and continuous stress, and I think it is quite proper that the House should, before we separate, desire to know how the matter stands now. Very briefly, in no studied words, I desire to give to the House, so far as I can, my appreciation of the situation in particular relation to the several decisive questions which have been asked by my hon. Friends.
What is the dominating factor in the situation, in which there are various
factors? It is this: that the Provisional Government, representing the majority of the elected representatives of the Irish people, representing the party with whom we signed the Treaty on 6th December; that that Irish Provisional Government is at the present time engaged in suppressing by force of arms a rebellion which has been set on foot against its authority, against the will of the Irish people, as expressed—where it could be expressed—at the recent elections, with the object of setting up a Republic in Ireland contrary to the Treaty. The Provisional Government, which is engaged in suppressing this rebellion, is supported in its action by the National Army, which, although it is not a very strong Army, is improving in discipline and efficiency each day, and appears to be perfectly conscious of the exact political cause and the exact political authority in pursuance of which, and in obedience to which, it acts. Not only is it supported by this army, but it is also supported by the ever-growing sympathy and conviction and irritation and wrath of the Irish people as a whole. This operation of putting down this disorderly outbreak for the first time in history is being discharged by a purely Irish administration drawn from forces which in ovary other generation and century have had no admiration for any word but rebel, and have, had no hatred for any other institution but the Government. This is really a remarkable spectacle to be presented to the world as the dominant feature in the Irish situation at the present time.
I only wish that Members of the House of Commons and of the House of Lords, and the editors and leader writers in our great and very active newspapers which play so great a part in our affairs at the present time would make a point of reading the Irish newspapers of all parties [An HON. MEMBER: "They are censored!"]—yes, they are censored only in regard to military operations and news which would unduly discourage the National troops. Anyone who follows these Irish papers will see how full they are of real information, often conveyed in the most unexpected way on the back pages of the newspapers, showing the real state of Ireland and the steady growth of a vigorous and manly public opinion in Ireland.
Take Dublin, for instance. When I spoke here last on this question the Four Courts, the Courts of Justice of that city, were held by a lawless intruder and a gang of desperadoes who had seized upon this place and claimed to establish a Republican executive from that centre. At a tremendous cost in public property and at some cost in lives—perhaps not so serious compared with our experience in the recent War, but nevertheless at a considerable cost in property and life—this intruder and his band have been captured and are now in gaol. They have attempted to escape from gaol, but they have been fired upon and put back in the cells, and the ministers of religion who were with them were treated as if they had nothing to do with this world, although their spiritual activities were of a very expensive character. Every day that has passed, every week that has passed the citizens of Dublin have come more and more to the conclusion that they are the victims of this disorder, they are the sufferers for this movement, and if they cannot pull themselves together and form a stable Government platform for the National Administration to rest upon, their prosperity, their comfort, and their peace will he disturbed, and they will suffer far more than anyone else. They have had the feeling growing upon them every day that has passed since I last spoke, that there is no one behind them, that they must do it for themselves, and that if they cannot establish the sanction of law for life and property in their own country, out of forces resident in their own nature, this great experiment and great hope of Irish self-government will be ruined, and they will get their throats cut and their businesses destroyed. That is the most formidable teaching which is being administered to them, and it has had the effect of increasingly stabilising and consolidating Irish opinion.

Mr. G. BALFOUR: The British Government does not count any more.

Mr. CHURCHILL: It is the Irish Government that counts there, and the interruption of my hon. Friend only shows the gulf between him and the opinions of nine people out of ten. That conviction in Dublin is strengthened with every week that passes. What do you read in the papers published every day in Dublin? You read complaints that the Govern-
ment of Mr. Collins are conducting operations with kid gloves. These are the complaints which throughout have been employed by those who are rather foolishly described as the Die-hards, who constitute the extreme right faction of political life. That language is now being used by a paper which up to a year ago had been the most violent propagandist of revolution and revolt.

Mr. G. BALFOUR: What paper?

Mr. CHURCHILL: "The Freeman's Journal." The same may be said of the "Dublin Independent." I say the most violent propagandists. Look at the cartoons in the "Freeman's Journal" of my right hon. Friend the Chief Secretary. There is the proof of what I say. What do you now read in those papers? Letters from Irishmen of all classes and nearly every creed, urging that stronger measures should be taken to restore order, and, in response to those letters, the Government—a Government not possessed of a highly efficient army or a great organisation, but a Government which can only move as it is supported by public opinion, in response to this movement of public opinion, is taking stronger action every day. I cannot myself feel that we have anything to regret in the course which events have taken. I would far rather have seen a peaceful acceptance of the generous offer which this country made in the Treaty, an acceptance which we were entitled to expect. But if we were not to have that, then I do not see how something in the nature of what is now taking place could have been avoided, if Ireland is to come into her manhood by herself. That is what is taking place. I have been asking myself a good deal in these last few weeks what are the conditions which are obtaining inside the area over which the Provisional Government have no control—the area which is held by the rebels. We get very conflicting accounts. The hon. and learned Member for York-talked of ruin and desolation; he spoke of victims of every class who are suffering there. I have received some accounts of a very pessimistic character from persons resident in that area, or who have valuable property in that area. But I have also received other accounts of a reassuring character, and I admit that the evidence is extremely conflicting. At
any rate, however, there has been no general exodus, or even considerable exodus, of loyalists or persons of the Protestant religion or of Unionist sympathies—I will describe them by any phrase that may be considered appropriate. There has been no general exodus from the regions which are at present under the tyranny of the rebels.

Lieut.-Colonel ARCHER-SHEE: Can the right hon. Gentleman say if those loyalists are allowed to go? I do not think they are.

Mr. CHURCHILL: I agree that that is a perfectly fair question. Still, there are four boats running from Cork every week now, and the whole of the frontier between the Provisional Government area and the area now occupied by the insurgents is very loosely held, so that I cannot conceive that, if that were anything of the nature of a reign of terror, a general state of ruin and desolation, accompanied by frequent acts of bloody murder and cruel outrage, prevailing in this area, great numbers of persons would not have found their way out of it by one path or another.

Sir J. BUTCHER: Is the right hon. Gentleman aware that many disbanded members of the Royal Irish Constabulary have been driven out?

Mr. CHURCHILL: I am certainly aware that there are numbers of persons who have come over to this country, and who are in distress, but, compared with the great mass of the people, compared with the 350,000 Protestants or Unionists living in the South of Ireland, that number, although very serious—and I am not in the least mitigating it—does not for a moment represent anything of the nature of a general exodus. I do not think there is a reign of terror inside the rebel area. What is happening is that everyone is put to extreme inconvenience and considerable loss. Their business is interfered with, their roads are obstructed, the poor people cannot get to their work, the factories are disorganised, the farmers cannot carry their produce to market, the trains cannot run to carry out of the country the goods that they have to sell, or to bring in the goods that they want in return; the shopkeepers are pillaged in many cases, the banks are held up, and all sorts of illegal exactions have been made, of a com-
paratively petty kind, but in the whole amounting to a most odious tyranny upon those people, and put upon them by persons who have absolutely no representative authority of any sort or kind, and who have newly been repudiated by the mass of their own fellow-countrymen at the election.
And what is the result? The result is a growing indignation, and even fury, in these districts, against these irregular marauders, who are rapidly reducing the cause of the Irish Republic to the level of a, nuisance and an abominable interference with ordinary private civil life. That, again, is a process which, perhaps, had to play its part in the long journey on which we are now engaged. Wherever the troops of the Irish Free State advance they are welcomed by the population. They are received with enthusiasm as deliverers and as rescuers, and, although their numbers are not great—they are, perhaps, under 30,000 rifles, with, perhaps, 20,000 ancillary services, machine guns and armoured cars—although they are a new and a young army, yet, buoyed up by the support of the population, they are able to advance continuously and to take one place after another. I am not going to predict what the course of the military operations will be. God knows, we have all had enough disappointment in the last ten years on subjects of that kind. But, at any rate, I see nothing to feel depression about in the progress which is being made by the Irish National troops. I believe they will continue to go on, supported by an ever-growing measure of public opinion and of support from the people until they have driven the irregulars and bandits into the hills. I have no doubt there will be a further stage when those people are being reduced to order after they have taken refuge in the hills, but, so far as the military operations are concerned, we have no reason to believe they will not be brought to a satisfactory conclusion—I will not commit myself to any period of time, but, at any rate, before we re-assemble.
It is not a bit true to say the only people who are suffering from this inconvenience and disorder are the Protestants and Unionists and Loyalists I do not believe they are the principal sufferers. It is quite true that beautiful homes have
been burned, but not in great number. Apart from those homes, the great bulk of the loss has fallen upon shopkeepers, and the smaller shopkeepers have suffered as much as anyone. Their shops have been requisitioned by the irregular army again and again, and hotels and inns have all been made the subject of trespass by persons who have never had the slightest intention of paying the bill. When Tipperary was taken a few days ago the rebels blew up the water main, thus ruining the water supply of the town for several months and inflicting the danger of disease, apart from any inconvenience, on the whole mass of the population, and particularly upon the Tipperary population. When a factory was burned clown at a place I do not remember for the moment, on whom does the loss of that fall? Four hundred workmen are thrown out of employment. When the Clifden wireless station was destroyed another 400 workmen were thrown out of employment. Bridges are blown up, railways cease to run and railwaymen are thrown out of employment. All this is raising a feeling in the Irish breast that the maintenance of law and order is not a matter that can be left to the British Government, but one that concerns every individual man, woman and child, and it is on that that we hope the future will build itself up. If the odium with which the rebels are regarded is growing steadily, so is the discipline and organisation of the national forces. I hear a great many disparaging remarks about the way they conduct the war. It is said they do not kill enough, that persons are not executed when they fall into their hands, and all that sort of thing. I believe it is the wish of the Provisional Government that their forces should suffer more loss of life than the people against whom they are fighting. If you look at the actual position in Ireland, you will understand the reason, although you may not agree with it. For all these centuries, no pure Irishman, no native Irishman, no mere Irishman, as they were called, has had the responsibility of the control of the Government of their country. They have always been in revolt, in opposition. The Government has always been to them an odious thing to be attacked. These habits of thought, which have dominated them for centuries, change
very slowly, and the Government in Ireland has had, in the first instance, to put itself into the position of being an ill-used thing. It had to put itself into a position where some public opinion in Ireland would say: "It is not a fair way to treat the Government"; "it is not a fair way to treat the soldiers. You rebels are the oppressors. You have no right to oppress them and ill-treat them so." I am not saying that that is a right or wise method for public government to follow. I think it is running a great risk. I should be sorry to see that principle applied here. I hope that any Government of which I have the pleasure of being a member will always be able to say that, it has given back as good as it has got and a little better. But that is the principle which rules in Ireland; but a considerable change is passing over the country. I notice a much sterner air in Irish affairs than prevailed at the beginning of these troubles.
There is another test that you can apply to what is actually happening in Ireland. I am not minimising in the least the disorder that is occurring, but do not let us go about talking as if it were another French Revolution or Russian Bolshevist explosion or a Jacquerie or a reign of terror, or anything like that. That is nonsense. Take the trade of Ireland. One would suppose that trade has been brought to an absolute standstill. As far as I can make out, the great volume of trade between this country and Ireland has not been decisively diminished within recent months. Certainly, up to three months ago it had not diminished according to the returns. Outside the actual area of military operations the country on the whole is running on normal lines, although prices have gone up. Of course, the cattle trade must be adversely affected by the railway dislocation, but I read in the Dublin "Evening Herald" to-night as a mere item of news:
Big stock exports: To-day is the busiest day at the North Wall since 1914. the railings of livestock steamers amounting to 12 vessels.
The cattle market report says:
The market, notwithstanding the increased supply, 810, may be considered good as regards prices.
The pig market is brisk.
Vegetable market: Good supply of all classes of vegetables.
and so on. It is a great mistake to suppose that we are confronted with an absolute breakdown of the processes of trade and business in Ireland, although there is a most lamentable destruction going on. Take revenue. The flow of revenue has not been affected by the recent hostilities in Southern Ireland. One would hardly believe it. The receipts for the week ending 22nd July are higher than in any previous week since the Provisional Government was given control of public business. A sum of £1,323,000 was collected into the Irish Exchequer during the week ending 22nd July.

Sir J. BUTCHER: Can the right hon. Gentleman tell us how much came from Guinness's Brewery, and how much from the South?

Mr. CHURCHILL: A. good deal comes from the Customs, but there are also the Excise and the Income Tax. These, I am informed, are being collected steadily over the whole of Ireland. An estimate was made that if all went well in a normal year the Southern Irish revenue would produce £25,050,000. £7,076,000 has been received in the first 16 weeks of the year, and there is nothing that we know of, up to the present, that should lead us to believe that the revenue anticipations will not be fulfilled. The balance in the Irish Exchequer on 22nd July was £2,800,000; that was the highest balance in all the 16 weeks that their Exchequer has been functioning. This is a most astonishing country; a most astounding country. Side by side with the disquieting facts, we are entitled to dwell on these encouraging facts—I do not put it higher than that. I learned this morning that the Irish Provisional Government have given directions that the ten awards of the Shaw Commission that have already been given, aggregating, I think, about £150,000, are to be paid in the course of this week. That is the first obligation they have had to meet in accordance with agreements entered into, and it appears to me, if this anticipation is borne out, as I have every reason to believe it will be, that this obligation will be most punctually and correctly discharged. I need hardly say how important that is, not only on the merits, but as indicating the intention that this Government, who are so gallantly carrying on a fight and struggle, as they are doing in danger of their lives
and under all the difficulties with which they are confronted, have in mind; and I am bound to say, on this last night of the Session, that I see no reason for regretting the course which we have taken.

Mr. GWYNNE: Will the right hon. Gentleman answer my question about a time limit?

Mr. CHURCHILL: We have consistently used—and we will continue to pursue the policy we have been pursuing —the two greatest weapons England has ever applied to Ireland, namely, Irish responsibility and British good faith. We will continue that course during the three months the House is now going to he separated. When I am asked, "Ought we to institute a time limit during which they should be able to restore order or call their Parliament together?" I say, "No, certainly not at this stage or in these circumstances." We cannot go to these harassed men and fix a time limit in relation to circumstances that no one can presume to measure or weigh, when they are making a, sincere effort to reach a settlement on the basis of the Treaty. So far as one believes that—and we are entitled to believe it by reasonable evidence—one must share the feelings, the delay and the disappointments of the struggle which is proceeding. Nothing would be more foolish than for us to fix some date—one or two months hence—and to say that by that time Ireland is to be orderly and peaceful, and by that time a Parliament is to be in full Session, supporting the Government in making Ireland orderly and peaceful.
Where should we be, two months hence, when we had said such a foolish thing as that? What should we do if, in answer to our dictation of a time limit, these men who are carrying forward this policy under these tremendous difficulties and are struggling forward at personal risk, said, "all right, with your time limit. Perhaps you had better take the business over and do it yourselves in the way that you have done it so well before." We should be in a lamentable position if we had suddenly to go back into Ireland with great masses of troops and police and endeavour, with all the factions united against us, to enforce our will and authority over that country. I cannot imagine anything more disastrous.
The position cannot be surveyed completely without reference to the North and I must say a word about that before I sit down. The position in the North has improved greatly. I have received a report from Belfast to-day from the Northern Cabinet which informs me that:
The Republican campaign reached its height in Northern Ireland during the latter part of May when 32 murders occurred in one week and many outrages, raids and incendiarisms took place. The Special Constabulary were largely increased and there has been a steady improvement in the situation and serious crime hats greatly diminished. In the fortnight ending 24th June there were 24 murders. In the fortnight ending 15th July there were four murders and 17 persons wounded, and in the week ending 29th July there wore no murders and seven wounded. There were three cases of arson only in each of the last few weeks. Lootings and hold-ups have nearly ceased. The Primary cause of this improvement is the Special Constabulary, but contributory factors are the internment of some 300 active Republican leaders and the fact that the conflict in Southern Ireland has drawn away many of the most active.
I am giving the House the information which reaches me from various sources. They say also:
There is a tendency on the part of Republicans to drift back from Donegal and to the south and into the mountain districts so that a recrudescence of outrage is not impossible, but the authorities are satisfied that they can cope with it…Catholics are now welcoming the advent of special constables into their districts. The situation in Belfast is almost normal. Public confidence is being restored in the ordinary civil administration. Trial by jury is working smoothly throughout Northern Ireland. The number of cases being tried is large. At the Belfast Assizes there were 57 Protestants and 24 Catholics charged with indictable offences.
I am entitled to present the ease as a whole. I say, when you consider what has been happening with all that is good and bad in Southern Ireland, and when we consider the report from Northern Ireland, we have no right to say that the path along which we have been proceeding is marked by failure. I pay my tribute to the character of the Northern Government. They have been through a terrible period of anxiety, rendered terrible not only by the danger to which they were exposed, but by the brutal action taken by some misguided and criminal persons who desired to take revenge. Some of the action which they have taken is, no doubt, calculated to cause a great deal of irritation in other
parts of Ireland. The imprisonment of 300 persons against whom- no charge is formally preferred is, naturally, a, cause of great reproach, but, on the whole, looking at these matters, as you have to do, in a broad and rough fashion, I am certain that the severity which has been practised by the Northern Government, practised impartially against Catholics and Protestants, will, on the whole, tend greatly towards preventing loss of life.
11.0 P.M.
Nothing could be worse than the continued anarchy which was growing in that city, and that Sir James Craig, Lord Londonderry, Sir Dawson Bates and other members of the Northern Government Government should have succeeded in calming matters and in re-establishing w great a measure of law and order, is, to my mind, very greatly to their credit. I am entitled to say on behalf of the British Government that that function could nut have been carried out by the Northern Government if the British Government had not kept their word by standing by Ulster and giving them all the effective support that they required. Whether it was in troops, in arms or in money, every form of support that they have required has been given. Show me a responsible person to speak on behalf of the Ulster Government who will traverse that statement. Large numbers of troops, 25 battalions, are there. In addition, there are 50,000 stand of arms, and all that is needed to equip a force of that kind has been provided. In addition, nearly 4,000,000 a year has been voted by this House to maintain in this trying period the various forms of police force and special constabulary which are required. We are entitled to say that, just as we have rigorously and logically pursued the course and policy upon which we have embarked in Southern Ireland, of allowing a native Irish Government to bear the whole responsibility of settling matters as they think right and fit, and to work out the salvation of their country, in the same way in re gard to the North we have given it, all that it requires to enable it to preserve its own independent life and rights, until such time as it may choose to join its hand with Southern Ireland. As the Northern Government becomes increasingly strong and secure, as it becomes more and more undisputed master
in its own house, it will more and more be able not merely to be impartial but tolerant and compassionate; it will more and more be able to release and relax the exceptional measures for public security which are necessary in a time of great commotion. That, I know, is the wish of the leading men in that administration. They have every inducement to reduce their police forces; they have every inducement to relax exceptional measures. I am certain that they will do so at as early an opportunity as they possibly can. I hope and I believe that the Irish people in the South are going to win through. I am sure that the North is going to stand like an impregnable rock, whatever may happen in future. My hope is that if the South win through, if they show themselves capable of establishing decent order and of constructing a Government in harmony with the Treaty—my hope, and a growing hope, is that then the North will reach out a hand of help and comradeship to aid them in the building up and maintenance of the peace and prosperity of a united Ireland.

Lord HUGH CECIL: The right horn Gentleman has made an interesting speech, to a great deal of which, everyone of whatever political opinions, must have listened with sympathy. We all desire that the Northern Government should restore order—which they have to a large extent done—and we all desire that the rebels in the South should be defeated, and that the consequences of the victory should be peace and order all over Ireland. The success of the Northern Government, in so far as it has succeeded, has been achieved by returning to the old principles of the enforcement of the law, which, let me say, have not been practised in Southern Ireland under the Southern Government, and were not practised by hon. Gentlemen opposite when they were in charge of Irish affairs. They were sometimes coercive and sometimes conciliatory, but they never enforced the law. They sometimes allowed the police to break the law; they sometimes indulged criminals in law breaking; but the old-fashioned enforcement of the law, such as always succeeded in Ireland in the past, and is now succeeding under the Northern Government, has never been attempted. The hon. and gallant Member for Stoke
(Lieut.-Colonel J. Ward), in the course of his speech, said no one would now propose to break the Treaty. I quite agree with him. I fully agree that the Treaty having been made—however unwisely, as many of us think—it is an obligation, not only of policy, but of honour, and that we should act both foolishly and wrongly if we broke the Treaty on this side.
The question really arising is, what are you going to do, supposing Ireland continues in such a state of disorder that law-abiding people, honest men, suffer oppression, whether by robbery or murder, over long periods, and there is no apparent prospect of their being relieved? A point of Order was raised as to whether we were entitled to discuss this matter on the present occasion, but it must have occurred to everyone that on occasions of this kind we have discussed the oppression of people who are not subject to the British Crown at all. On occasions of this kind Mr. Gladstone denounced the treatment of the Bulgarians and the Armenians, and there is no reason why we should not discuss the ill-treatment of law-abiding citizens in Ireland. I use that as an illustration, for the purpose of pointing out that a case ultimately may arise, and is perhaps now arising, when this country ought to interfere, not in respect of the Treaty, not in respect of the old controversy at all, but in the general interest of civilised government. I need not tell my right hon. Friend the Colonial Secretary that this country has always interfered all over the world in the interests of civilised government and has interfered in places where it had less cause to interfere than now exists in Ireland. Though I quite agree that nothing could be more absurd than to fix a definite time limit of two months or three months, yet something resembling a time limit must be fired. We cannot indefinitely tolerate anarchy in Ireland. I do not say that, because it would be a breach of the Treaty—although I think it would be a breach of the Treaty. I say it because of a consideration much more fundamental than any question of the Treaty or nationality or forms of government. It would not be consistent with our reputation as a Christian, civilised Power to allow our fellow-citizens to suffer intolerable ill-treatment over an indefinite period. No doubt there is great difficulty in ascertaining exactly
the extent of the oppression to which various persons have been subjected during the last few months. A large number of murders have certainly been committed. Particulars have been given to me, and while we know figures of this kind are not always to be relied upon, these particulars, for what they are worth, deserve the attention of my right hon. Friend. During June it is estimated that the murders were 18; shootings, beatings, and other serious assaults, 34; arson, 22—

Mr. CHURCHILL: Is that in the South?

Lord H. CECIL: My right hon. Friend gave some statistics—very sad ones—of the disorders in the North, but I am now dealing with the South. Of thefts there were 36; kidnappings, 8; warnings to leave under threats, 36.

Mr. CHURCHILL: Is that in the 26 counties?

Lord H. CECIL: Yes, in the districts in which the disturbances have taken place. Probably my right hon. Friend will understand my not vouching for them, because I have been so long a student of Irish affairs that I am always willing to admit that statements of fact coming from Ireland are open to great criticism. There is, therefore, reason to think at any rate that there is great suffering, and it is no doubt the case that the public conscience in this country is beginning to be enormously stirred by the feeling that these people have been left defenceless and are suffering largely—I do not say because they were loyal to this country—we have a great deal too much of this national controversy—but loyal to the ordinary principles of honest dealings in civilised life. It is intolerable really that in a country so intimately connected with England as is Ireland people should suffer really for nothing, not a bit because they were, as in old days, harsh men, because they were concerned with bringing to justice murderers, and were, quite improperly, called informers, scandalous as such acts of ill-treatment are, but because they are honest citizens going about their business, and are not in complete political sympathy with the majority. It is an intolerably slight ground for this sort of ill-treatment and cruelty. The right hon. Gentleman has expressed, as it is perhaps natural that
he should, hopes for the future. Let me remind him that the present rebellion, wicked and cruel as it is, is not at all more cruel or groundless or unprovoked than was the rebellion of 1916. Mr. Redmond had behind him in 1916 the assent of the Irish people, not merely as great as, but markedly greater than, the assent that now stands behind the Provisional Government of the Free State. The whole Irish people of the South, all except the Ulster Protestants, accepted the Act of 1914, and accepted Mr. Redmond's leadership.

Mr. CHURCHILL: They did not get it though!

Lord H. CECIL: They were going to get it as soon as the War was over, and they fully assented to the delay. May I remind my right hon. Friend of the words which Mr. Redmond used on 15th September, 1914, when the Act was passed? The whole speech is well worth reading, because of its enthusiastic support of the British Government and of the War, and because of its evident and sincere conviction that the whole quarrel was over, and that Ireland was as devoted to the common cause as any party in England, but I will read only the concluding sentences of a very eloquent speech:
Just as Botha and Smuts have been able to say in the speeches which were published three days ago that the concession of free institutions to South Africa has changed the men who but 10 or a little more years ago were your bitter enemy in the field into your loyal comrades and fellow-citizens in the Empire, just as truthfully can I say to you that by what of recent years has happened iii this country with the democracy of England, Ireland has been transformed from what George Meredith described a short time ago as the broken arm of England' into one of the strongest bulwarks of the Empire." — [OFFICIAL REPORT, 15th September, 1914; col. 912. Vol. 66.]
Within 18 months there was the Rebellion of 1916, and that, though very easily suppressed, brought in eventually the whole Irish people, greatly owing, it has been said, to the mismanagement of the right hon. Gentleman's colleagues. I do not believe that is the explanation, but the explanation often given is that the Irish Government was so incompetent and so oppressive that they turned the support of Mr. Redmond into hostility. I believe that to be an entire I am no
admirer of the Government of my right hon. Friend the Member for Paisley (Mr. Asquith) or that of the present Prime Minister. I do not believe it was their blunders that did it entirely. It was the extraordinary political levity of the Irish people, and their absolute subservience to small minorities of active, unprincipled, cruel men, and there is no security against that in the future. This rebellion will no doubt be put down, as all Irish rebellions are put down, with comparative ease. The Irish rebels are not strong at fighting. Their strong point is assassination, and the real difficulty in Ireland always arises, not in dealing with rebellion, but in dealing with the prolonged unrest and assassination after.
The questions we really want to press on the Government are two. First, is it true that the Provisional Government are really loyal to the Treaty? I do not mean to say, is it true that they are guilty of small breaches of the Treaty or not? It is a deeper question than that. Do they really intend to work the Treaty so as to make Ireland part of the British Empire, or do they intend to use the Treaty for the purpose of a complete Irish Republic? Much of the language of the leaders of the Provisional Government, or certainly the language I have been fortunate, or unfortunate, enough to read, has suggested that it might ultimately be a Republic, although they sought to obtain it through the machinery of an Irish Free State. What ground is there for thinking, from any of the language they have used, or any of their actions, that they really intend to work the Treaty as a permanent settlement of Irish affairs? That they intend to suppress this rebellion is quite true. It may very well be a contest between two Irish factions, which are always contests sufficiently bitter. Then if they do want it, is there any reason to think that they can do it? Have they shown any great capacity for government? These military operations do not appear to be conducted with any very conspicuous skill, and even in the parts of the country which have been recovered, or reconquered, which I believe is the proper phrase—

Mr. CHURCHILL: Liberated.

Lord H. CECIL: Liberated, or whatever word you like—where the irregular murderers have been turned out by those
who have abandoned murder for constitutional action. It does not follow, apparently, that order is restored. I read to-day or yesterday of a raid in which £500 was stolen from a public office in Dublin. It does not suggest that law and order are restored in the districts, even where the Provisional Government has driven out its opponents. I have said that I do not complain of the Government adhering to the Treaty. If ever we are asked to interfere in Ireland again, I hope we shall interfere only in the interests of civilised government and in the name of civilisation. We do not want to resume a national quarrel, if ever there was a national quarrel. Personally, I do not admit there has ever been in any real sense for hundreds of years a national quarrel between England and Ireland. The strange desulsion—for it is nothing better—by which 'Sinn Fein and the Irish people have always maintained that they could be independent of England is a fiction so grotesquely absurd that it is astonishing that a movement so considerable should rest on a basis so frail. But there is a great lesson to be learnt from Sinn Fein. It is very clear that the Irish are very much under the influence of ideas, some of them very silly, some very astounding, some very wicked, I fear—and there can be no doubt that what happened during the extraordinary change of opinion between 1914 and 1918 was the movement of ideas, the percolation of ideas. It is not in the least true that the Irish wanted in 1914 what they wanted in 1918. They badly changed their minds. If you are going to solve the Irish question you will have to deal with ideas. The Irish have never provoked any ideas. Intellectually they are a naked people. Their ideas are imported. On the present occasion it is quite easy to show that all these Irish movements have originated, some of them in France, some in England, some, perhaps, in Russia.
The true solution which I venture to tell the Government lies in treating the Irish Question as a moral, not a political one. That is its true character. You will never solve it by re-adjusting the political machinery, by making it an Irish Free State, or this, or that. It is not true that all the races of the world are capable of self-government. The vast majority are quite incapable of it.
It is but misplaced optimism to say that the Irish are in the minority. What prospect of success is there with the present Government, who do not themselves believe in ideas? One despairs of their reason because their action is so contradictory, and it must be supposed that their ideas are contradictory; therefore, they are maniacs to draw the conclusions they do.
The Government believe in nothing but sticking to office. It is the only thing they have any success in. I admire the complacency of the right hon. Gentleman the Colonial Secretary who is conscious that, at any rate, they have done this well. I like their candour. The fact that the Government have succeeded in doing nothing well but retaining their places is obvious to everyone. I am only surprised that the Government contemplate it themselves with so much pleasure. No, Sir; when the right hon. Gentleman says that the Government have not failed, let him ask himself where the Government started in 1914. I quite agree there are many other causes at work. The right hon. Gentleman claims—perhaps quite rightly—that things are a little better; but what he does is to take the very best in the first few months and say: "We are just a little better than that." If that is what you call success I should say it was because you do not always fail, or that really the inherent power of human nature to right itself is such that, however badly the Government managed you cannot utterly destroy the hopes of something better. Anyone who compares the condition of Ireland in 1916 with its condition now must admit that the Government have failed as colossally and as calamitously as it is possible for a Government to fail. This frightful series of unsuccessful experiments in the art of Government have been done at the cost of a large number of human beings. People have died and have been robbed, houses have been burned and distress of a far-reaching kind has been inflicted on the people and the Government come down here and ask us to continue this policy by which in fact they have brought Ireland to the brink of anarchy, and there is no certainty and little hope of any return of the light of peace and prosperity which prevailed when other Governments were in power and other principles were in force.

Mr. ACLAND: The question I want to raise is one of which the Financial Secretary to the Treasury is cognisant and it is a very long way from Ireland, namely, that of the very serious position of that great scientific institution the Imperial College of Technical Science has been placed in regard to the grant.

Mr. J. JONES: Is Ireland finished with? If so, I wish to protest against a speech like the one just made by the noble Lord the Member for Oxford University (Lord H. Cecil) being allowed to pass without a reply.

Mr. ACLAND: I wish to refer to the grant made this Session to this College, as hon. Members are aware it is the only institution we have for the higher teaching and research work in these special sciences. By its charter it has to give the highest specialised instruction and provide the fullest equipment for various branches of science, especially in its application to industry. All our great learned societies and our great Dominions are represented on its governing body, and so are the London County Council and the Board of Education. Its treasurer was Sir Francis Mowatt, and I only wish to say about its work that the Colonial Office continually requests it to make special efforts to meet the demands of our industries overseas such as the rubber, tea, and the agricultural industries, for trade specialists to deal with the question of cultivation and plant diseases. What is its position? Unless something is done with regard to its finances it will have three courses only before it. The first is for this college to reduce itself, in a sense, to the level of a polytechnic, which of course is contrary to the charter. The second is to cut out some of its main departments such as the Department of Chemistry and the Department of Physics; and the third is to ask for leave to hand back the Royal College of Science and the Royal School of Mines, which would then have to be carried on by the Government at a greatly increased cost.
The reason for this is a very simple story. Eighteen months ago the University Grants Committee, which is the Department which administers all these institutions—Universities and University Colleges—complained of the action of the Imperial College in readjusting its scale of salaries after the War. The scale was not such as to compete with what the men who are teachers here would have got in
industry or commerce outside, and the amounts granted were only necessary to bring the salaries up to a minimum which would retain the extraordinarily distinguished staff the institution had got, including as it did no fewer than nineteen Fellows of the Royal Society. It was indicated that a special inquiry by the Government might be necessary because it was feared that the College was spending too much of its capital. Lord Crewe, the Chairman of the Governors, intimated that an inquiry would be welcomed. In July of last year a Committee was appointed. It consisted of three very eminent and skilled persons—Lord Meston, Sir M. Fitzmaurice and Mr. Meiklejohn, a Treasury official. The Committee got to work during the winter with a view, it was hoped, of reporting in January or February. The question referred to them was a simple one, i.e., whether the action which the Governors of the Imperial College was really necessary in order to carry out their duties under the Royal Charter. For months the Governors of the institution have been -Waiting for the report of this Committee. I believe Lord Meston, the Chairman, was indisposed, but that would not account for the thirteen months' delay and the suspense and doubt into which the College has been thrown with regard to its future. Meanwhile the University Grants Committee, no doubt justifiably through the first few months, has used the fact of this special Committee's existence as a reason for delaying the grants that have been made almost automatically to other institutions of University rank. They have even stated that the funds at their disposal were all allotted to other institutions so that no increased grant on account of the session 1921–22 could possibly be given. So serious was the position that in February of this year Lord Crewe wrote to my hon. Friend pointing out the seriousness of the position and asking whether the Government really intended the Session to go by without the College knowing where it was going to be if all the money at the disposal of the University Grants Committee was to be spent on other institutions. My hon. and gallant Friend replied in March this year in a very reassuring way. He said there was no need to suppose that if the Investigating Committee recommended the sort of increase given in every other case it would not be possible to find the money beyond the balances which the University Grants
Committee had stated were all exhausted. There was thus a little bit of sunshine for the governors to go on with.
But still the report was delayed. Sir Alfred Keogh, the Rector, retired, and the new Rector (Sir Thos. Holland) is still in doubt as to the scale on which it will be possible to conduct the College when it meets in September. Although many Colleges and Universities have, since the years 1913–14, received increased grants, this great. Imperial College in London has only had about one-fourth of the sum, and, as I say, the governing body representing our Dominions and our great scientific industries, do not know what to do, or what their position will be. They only know that, if these teachers are to be turned off, they ought to have notice, that if Departments are to be closed arrangements should be made. I have been hoping against hope that the matter would be cleared up long before now, that the Meston Committee's Report would be received, and that the Governors of the College would be informed before the end of the Session what their position was this Session, and what it is likely to be next Session. I know that my hon. Friend has done his best. I told him yesterday or the day before that the Committee had not reported, and he told me that he would do his best, as I am sure he will, to see that it should report. I regret having to suggest that other people should do work at a time of year when I hope I shall not have to do very much myself, but unless those responsible for this great College can be told before the end of the vacation, in time to lay their plans for October, what their position will be, there will be great difficulty and trouble. The scientific societies of this country will bombard the Treasury, on the ground that this great institution has been most unfairly dealt with. I raise the matter now in order that the Government may be warned about it while there is time to hurry things up and get a decision, so that the present almost intolerable position of this great Imperial institution may be relieved.

Sir PHILIP SASSOON: I do not propose to follow the right hon. Gentleman the Member for Camborne (Mr. Aclaed) on the subject on which he has spoken, but I should like to take this last opportunity during this present Session of rais-
ing, very briefly, another matter. It is one which has been engaging for many years past, but I think never so seriously as is the case to-day, the anxious attention of the trustees of the National Gallery, on whose behalf I am empowered to speak on this matter. The facts of the matter are very simple. They are that there are to-day in private hands in this country some six or eight, or perhaps ten —in any case not more than a dozen—well-known works of art of outstanding merit. They are unique of their kind, and their loss would be a serious blow, not only to art in this country, but to the millions of men and women of all classes who admire and take pleasure in beautiful things. It is only too well-known to every Member of this House that for many years past famous works of art have been passing out of this country into the hands of foreign purchasers, and that of late this process has been accelerated, for reasons into which it is needless to inquire. The ultimate result will be that, unless immediate and adequate steps be taken to prevent it, the very few of these treasures of art which now remain in this country will follow those which have already gone across the sea. I do not think it is really necessary to argue, at this stage, that the possession of art treasures and the power and opportunity of appreciating them, are of real advantage to a nation. Art is part of our civilisation, as civilisation is known today, and as I think it will be known for many centuries to come.
What I should like to emphasise is the increasing interest taken by all classes of the community in works of art to-day. This is evidenced by the steady increase in the number of persons who visit our national galleries and museums. It is from that point of view that the trustees of the National Gallery are exercising their minds. On the one hand they see this constant and most gratifying increase in the interest in works of art on public view to-day; and on the other hand they see the finest examples of art which have been left in private hands in this country steadily leaving our shores. The whole nation is the poorer for the loss, and it is especially the poorer sections of the community who suffer most. The trustees are not particularly concerned with the owners of these works that they have in mind. They are not the people whom they wish to protect. It is the general public,
the man and woman in the street, who have no other power of gratifying their taste for art except by visiting our museums and national galleries, whose interests they wish to protect before it is too late. The principle is already established. The nation has in the past made very considerable grants for the purpose of acquiring art collections. We owe some of the finest things in our art galleries to-day to grants made by the Treasury in years gone by. We owe much, too, to the generosity of private donors.
The point I wish to emphasise is that, in asking the Treasury's aid to-day I am not asking anything new or anything out of the ordinary, or anything which is not supported by precedent. The only thing that is out of the ordinary is the seriousness of the situation. It is a matter which cannot wait, and if we as a nation are too hard pressed financially to be able to take the necessary steps to acquire these very few remaining treatures when and if they become for sale—it may not be for many years to come—the chance is gone for ever. The causes which are bringing works of art with increasing frequency on the market make it hopeless to look to private effort in the matter, and the £5,000 which the trustees get yearly from the Treasury is wholly out of proportion with the prices that really important works of art command from foreign purchasers. There is no way of saving these eight or ten masterpieces except to revert to the policy of special grants for special purposes, which has been followed for over a century by successive administrations. These works of art would not come simultaneously on the market. All that is asked is that the Treasury should be empowered, when circumstances compel the owners of these works to part with them, to grant to the trustees the special sum required, to enable them to attempt to acquire these few masterpieces for the nation at a fair market price, or perhaps a little less. There are few private owners who would not be willing to make some sacrifice so as to keep these pictures in the country, and whatever the price the nation had to pay, it would be small compared with the advantages the community would derive from having these rare masterpieces as national possessions available at all times for all classes to see and admire. I feel
that I am pleading a good cause, and although I should like to be able to put its claims more eloquently, on the other hand, I do not despair of obtaining consideration for it from the Chancellor. I know that an assurance on behalf of the Government of tangible sympathy in this matter will be most welcome to my colleagues on the National Gallery Board, and I feel certain will prove to be beneficial and a sound investment.

Sir R. HORNE: I regret that I did not hear the speech of the right hon. Member for Camborne (Mr. Acland), but I am well aware of the question which he raised with regard to the Imperial College of Science. I regret very much that the matter has been so long delayed, not in consideration, but in the decision. We found it necessary, owing to the question whether the finances of the College were managed with the complete prudence that one would desire, to appoint a Committee to make inquiry. The Report of the Committee has been delayed far too long, partly through the illness of one or two members, and partly because of the extreme thoroughness with which they were doing their work. I can give my right hon. Friend an assurance that I shall do my utmost to expedite the receipt of the Report, and thereafter take such action as may be necessary in the circumstances. I regret very much that the matter should have been delayed so long, and I feel that the right hon. Gentleman's complaint has been thoroughly justified.
As to the subject raised by the hon. Member for Hythe (Sir P. Sassoon), the House will congratulate the nation on having so enthusiastic and studious a member of the Board of Trustees of the National Gallery. I appreciate entirely the point he has raised with regard to securing for the nation certain works of art which, as he has explained, if they were lost, would be entirely irreplacable, as they are part of the treasures of the nation. If we are to value art treasures at all, we must take every means in our power to preserve them. I have had the great privilege of an interview with Sir Charles Holmes and my hon. Friend the Member for Hythe, and I think it would be possible to take measures to preserve such masterpieces for the nation at a cost which certainly would not be extrava-
gant. Sir Charles Holmes has agreed to communicate to me confidentially the kind of pictures which he wishes to make certain of securing for the nation in the event of their owners being desirous of realising their value. They are not numerous. It would not be prudent for me to make any disclosures in regard to them; but they are comparatively few in number, and the cost at reasonable prices to secure them for the State would not be at all extravagant. Of course, the State could not be expected to spend money upon acquiring pictures at more than their true value. Accordingly, I have bad an arrangement made by which a reasonable price is now being affixed to the pictures, and, in the event of a larger price being paid for them, I am afraid that in losing them we could have nothing but the consolation of having done our best to acquire them. At any rate, we certainly ought not to allow such pictures to go out of the country if they can be kept here at a price which is reasonable Accordinly, I would be ready to assent to the proposal which my hon. Friend has made cannot, of course, bind my successors in office, nor succeeding Governments, but I think it is only reasonable that we should be ready to vote in Parliament reasonable sums of money to preserve such masterpieces, if they do upon occasion happen to become the subject of prospective sale which would have the effect of taking them away. Our National Gallery may be described to-day as second to no gallery in the world in respect of its general level of excellence. Some galleries may have individual pictures of greater merit, but on the general average of merit I do not think there is any gallery in the world that excels our own. We ought to keep up the standard of merit and not to lose these treasures of the world if, for any reasonable amount, we can preserve them to the nation. I have listened with the greatest possible sympathy to the speech of my hon. Friend, and I am very ready to agree, so far as I am concerned, to take means to attain the object in view, and to ask Parliament, under the circumstances which he has described, when they arise, to give the necessary Vote for this purpose.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

LOCAL GOVERNMENT AND OTHER OFFICERS' SUPERANNUATION BILL.

Order for Consideration of Lords Amendments read.

Sir HERBERT NIELD: I beg to move, "That the Lords Amendments be now considered."
I desire to thank the Leader of the House for his courtesy in allowing this Measure to come on at this late hour of the Session. The Bill passed its Second Reading without a Division and went through Committee with reasonable criticism, the Minister of Health pointing out that reasonable Amendments were required. I propose to move, therefore, that the Lords Amendments be agreed to. They have been made, not by the Lords of their own motion, but at the request of the promoters, and have been accepted by the Ministry of Heath. I desire to acknowledge with gratitude the great services rendered by Sir Alfred Watson, the Government Actuary, to whose advice we are deeply indebted. Very valuable services have also been rendered by Sir Aubrey Symonds and many other officers of the Ministry of Health, who have been very sympathetic toward the object of the promoters and have greatly assisted us in bringing these Amendments forward.
Each one of the Lords Amendments had been put down, and would have been moved on the Report stage in this House, but circumstances occurred over which I had no control—nor, indeed, had this House. The right hon. Baronet the Member for the City of London (Sir Frederick Banbury), as a railway chairman, was very anxious to keep off the Railway Fires Bill that he managed to prolong the Debate on the last day appropriated to Private Members' Bills, and so made it necessary to jettison the Amendments at two minutes to four o'clock, in order to save this Bill. These Amendments would have been moved then but for that unfortunate delay. I hope the House will allow the Amendments to be taken as speedily as possible, and that they will have their whole-hearted support and sympathy.

Question put, and agreed to.

Lords Amendments considered accordingly.

CLAUSE 2.—(Adoption of Act).

This Act shall not apply to a local authority unless and until—

(a) it shall have been adopted by such local authority by a resolution passed by a majority consisting of not less than two-thirds of the members of such local authority, present and voting at a meeting called for the purpose of which a month's previous notice shall be given to each member of such local authority, together with an estimate certified by an actuary of the cost to the local authority of adopting this Act; and such resolution shall also have been confirmed by such local authority at a regular meeting held not less than one month after the passing of such resolution:
(b) such resolution shall have been approved of by the Minister of Health.

Lords Amendments:
At the end of paragraph (a) insert the word "and".
In paragraph (b) leave out the word "of" ["approved of by"].

Leave out the words "of Health."

Agreed to.

CLAUSE 3.—(Adoption, of provisions relative to officers.)

A local authority may, subject to the provisions of the Section of this Act of which the marginal note is "Adoption of Act," adopt the provisions of this Act so far only as they relate to officers:
Provided that such local authority may, subject to the provisions of the said Section of this Act, subsequently also adopt the provisions of this Act so far as they relate to servants, and the resolution to be passed and approved in accordance with the provisions of that section for the purpose of such adoption may provide for the inclusion of both officers and servants in one fund or for a separate fund in respect of servants.

Lords Amendment:

Leave out the Clause.

Agreed to.

CLAUSE 4.—(Definitions.)

In this Act unless the context otherwise requires—
Contributing service" means service rendered by an officer or servant while he is a contributor to the superannuation fund;
Joint appointment" includes any office or employment the tenure whereof is determined by the death, removal or incapacity of another holder of office under or of another person in the
service or employment of the local authority;

Provided that this Act shall not apply to any such local authority, or combination of local authorities, which, at the time when this Act is adopted, employ less than fifty officers or servants proposed to he designated as officers or servants for the purpose of this Act.
Non-contributing service" means service rendered by an officer or servant in respect of which he is not a contributor to the superannuation fund;
Officer," or "servant," means an officer or servant in the permanent service of the local authority on the appointed day or thereafter appointed, and in each case designated an officer or servant in an established capacity for the purposes of this Act by a resolution of the local authority, and whether in receipt of salary or wages;
Salary" or "wages" means all salary, wages, fees, poundage and other payments (including any War bonus) paid or made to any officer or servant as such for his own use, also the money value of any apartments, rations or other allowances in kind appertaining to his office or employment, but does not include payments for overtime; nor does it include any allowance paid to him to cover cost of office accommodation or clerks' assistance;
Service" as respects an officer or servant of any local authority means whole-time or part-time service in the permanent employment of a local authority after such officer or servant has attained the age of eighteen years—

(a) Rendered to that local authority whether before or after the appointed day; and
(b) Rendered before the appointed day to any other local authority of a kind which would have been reckoned as service for the purpose of paragraph (a) hereof; and
(c) Rendered after the appointed day to any other local authority which is under this Act permitted to be calculated for the purpose of calculating superannuation allowances.
The expression "service," when used in relation to service after the appointed day, means continuous service, and, in relation to service rendered before the appointed day, means any service, whether continuous or not;
Superannuation fund" means a fund to be established by the local authority in the manner prescribed and provided in the section of this Act of which the marginal note is "Superannuation_ fund";
Actuary" means a fellow of the Institute of Actuaries or the Faculty of Actuaries in Scotland.

Lords Amendments:

After the word "requires" ["context otherwise requires"] insert:
Service' means whole-time or part-time service in the permanent employment of a local authority after an officer or servant has attained the age of eighteen years, other than service in respect of which the officer or servant is entitled to any superannuation allowance or gratuity under any other enactment and when used in relation to service after the appointed clay means continuous service, and when used in relation to service rendered before the appointed day means service whether continuous or not.

Leave out the word "while" ["while he is a contributor"] and insert "in respect of which."

After the word "fund" ["while he is a contributor to the superannuation fund"] insert:
Non-contributing service' means service rendered to any local authority before the appointed day by an officer or servant occupying, on the appointed day, a post designated as an established post.

Leave out the words:
'joint appointment' includes any office or employment the tenure whereof is determined by the death, removal or incapacity of another holder of office under or of another person in the service or employment of the local authority.

Leave out the words:
Provided that this Act shall not apply to any such local authority, or combination of local authorities, which, at the time when this Act is adopted, employ less than fifty officers or servants proposed to be designated as officers or servants for the purpose of this Act.

and insert:
Provided that no local authority or combination of local authorities shall be entitled to adopt this Act unless there are in the service of such authority or of the authorities so combining as the case may be, not less than fifty officers or servants occupying posts proposed to be designated as established posts for the purposes of this Act.

Leave out the words:
'Non-contributing service' means service rendered by an officer or servant in respect of which lie is not a contributor to the superannuation fund.

Leave out the words
on the appointed clay and thereafter appointed, and in each case designated
an officer or servant in an established capacity
and insert
occupying a post designated as an established post.

Leave out the words "nor does it include," and insert the word "or."

Leave out the words:
'Service' as respects an officer or servant of any local authority means whole-time or part-time service in the permanent employment of a local authority after such officer or servant has attained the age of eighteen years—

"(a) Rendered to that local authority whether before or after the appointed day; and
"(b) Rendered before the appointed day to any other local authority of a kind which would have been reckoned' as service for the purpose of paragraph (a) hereof; and
"(c) Rendered after the appointed day to any other local authority which is under this Act permitted to be calculated for the purpose of calculating superannuation allowances.
The expression "service,' when used in relation to service after the appointed day, means continuous service, and, in relation to service rendered before the appointed day, means any service, whether continuous or not.

Leave out the words
in the Section of this Act of which the marginal note is Superannuation fund" and insert "Section eighteen of this Act.

At the end of Clause insert:
'Minister' means the Minister of Health,

Agreed to.

Lords Amendment:

After Clause 4 insert new Clause:

A.—(Subseguent designation of posts; and establishment of separate funds for officers and servants.)

(1) Where a local authority who have adopted this Act propose to designate at any subsequent date any further posts as established posts for the purposes of this Act, the date of such subsequent designation shall be deemed to be the appointed day as respects the officers or servants occupying the posts so designated at the date of designation, and the provisions of Section two and of paragraph (e) of Sub-section (1) of Section eighteen of this Act shall apply accordingly, unless and to the extent to which in any particular case the Minister otherwise directs.

(2) A local authority may with the consent of the Minister and in accordance with a scheme approved by him, establish separate
superannuation funds for officers and servants respectively, and any such scheme may provide for the transfer of officers or servants from one fund to the other and for making such financial adjustments between the funds in the event of such transfer as may be necessary.

Agreed to.

CLAUSE 5.—(Combinations of local authorities.)

(1) The following local authorities, namely:—

(a) The council of any county and any local authority whose area is wholly or partly situate within the county; and
(b) Any two or more local authorities whose areas are situate wholly or partly in the same county
may enter into combination for the purposes of this Act:

Provided that such combination shall not take effect unless a combination scheme has been submitted to and approved by the Minister of Health.

(3) Any local authority to which this Act applies may, on such terms and conditions as they think fit and with the approval of the Minister of Health, admit any officers or servants of—
Any authority or undertakers any of whose officers or servants are admitted as aforesaid shall have all such powers as may he necessary for the purpose of giving effect to such terms and conditions as aforesaid, and any payments under those terms or conditions shall be made out of the rate, fund, or revenues, out of which the salaries or wages of such officers or servants are paid.

Lords Amendments.

In Sub-section (1) leave out the words "of Health."

In Sub-section (3): Leave out the words "of Health."

Leave out the words "rate, fund," and, insert the words "same funds, rates."

After the word "revenues" insert the words "as those."

Agreed to.

CLAUSE 6.—(Title to superannuation allowances.)

(1) Subject to the provisions of this Act every officer and servant—
(b) who shall have attained the age of sixty years and have completed service as aforesaid of forty years; or

(3) Where an officer or servant has attained the age of sixty-five years lie shall cease to hold his office or employment:
Provided that the local authority may with the consent of the officer or servant by resolution extend the period of service or employment of any such officer or servant for one year or any less period and so from time to time as they may deem expedient:
Provided also that no contribution shall be made by the local authority or by any officer or servant to the superannuation fund in respect of any service for any part of any period of service under any such extension, and any such period shall be disregarded in calculating any superannuation allowance out of the superannuation fund.

Lords Amendments:

In Sub-section (1, b) After the word "completed" insert the words "forty years."
Leave out "as aforesaid of forty years.

In Sub-section (3): Leave out
service for any part of any period of service under any such extension
and insert "such extended period."

After the word "such" ["and any such period"] insert the word "extended."

Agreed to.

CLAUSE 7.—(Scale of superannuation allowances.)

Subject to the provisions of the section of this Act of which the marginal note is "Allowance for previous service" and to any other provisions of this Act the superannuation allowance to be made to an officer or servant under this Act shall be made out of the superannuation fund and shall be on the following scale (that is to say):
(a) after ten years' service ten-sixtieths of the average amount of his salary or wages during the five years which immediately precedes the day on which the officer or servant ceases to hold his office or employment, or attains the age of sixty-five, years, whichever be the earlier;
Provided also that, for the purpose of calculating the superannuation allowance of a full-time officer who has formerly served as a part-time officer, the period of part-time service shall be reduced to such proportionate extent as in the opinion of the local authority the circumstances may require.

Lords Amendments:

Leave out the words
the Section of this Act of which the marginal note is Allowance for previous service'
and insert "Section sixteen of this Act."

Leave out the words "(that is to say)."

in paragraph (a) leave out the word "precedes" and insert the word "precede."

Leave out the words
reduced to such proportionate extent as in the opinion of the local authority the circumstances may require
and insert
treated as though it were whole-time service for a proportionately reduced period.

Agreed to.

CLAUSE 8.—(Reckoning service in case of transfer).

(1) Where an officer or servant transfers from the service of one local authority who have adopted this Act, with the consent of that authority, to the service of another local authority who have adopted this Act, within six months of leaving the service of the first-mentioned authority, the first-mentioned local authority shall pay out of fly superannuation fund to the local authority to whom the officer or servant so transfers, a transfer value ascertained in accordance with rules made for the purpose by the Minister of Health, and in that case an officer or servant shall be entitled to such rights in respect of service before the date of transfer as though such service had been with the local authority to whom he has transferred:

Provided that any officer or servant may appeal to the Minister against the refusal of a local authority to give their consent to any such transfer, and the Minister after consulting the local authority may give his consent, which shall be equivalent to the consent of the local authority.

(2) Where an officer or servant transfers from the service of a local authority who have not adopted this Act to the service of a local authority who have adopted this Act within six months of leaving the service of the first-mentioned authority, he shall, if he pays in lieu of transfer value a sum or sums to be ascertained in accordance with rules to be made by the Minister, be entitled to reckon service with that, authority in whole or part in accordance with the amount of the sum so paid.

Lords Amendments:

In Sub-section (1): After the word "to" ["consent of that authority to the service"] insert "a designated post in."

After the word "authority" ["first-mentioned authority"] insert
and has been a contributor to the superannuation fund of that authority.

Leave out the words "of Health."

Leave out the word "an" ["an officer or servant shall be entitled"] and insert the word "the."

Leave out the word "though" ["as though such service"] and insert. "he would have been entitled to if."

At the end of Sub-section (2) insert "and in accordance with such rules."

Agreed to.

CLAUSE 9.—(Forfeiture for fraud, etc.)

An officer or servant who is dismissed or resigns or otherwise ceases to hold his office or employment in consequence of any offence of a fraudulent character or of grave misconduct shall forfeit all claim to any superannuation allowance under this Act:
Provided that in the case of any such officer or servant, the local authority may, if they see fit, return to him out of the super-animation fund-a sum equal to the amount of all his contributions thereto under this Act or to such part thereof as the local authority shall think fit.

Lords Amendment:

After the word "fund" insert "or-pay to his wife or family out of that fund."

Agreed to.

CLAUSE 12.—(Return of contributions in case of death.)

(2) In any case in which any contributor shall die after he has become entitled to a superannuation allowance under this Act and before he shall have received- by way of superannuation allowance an aggregate amount equal to the amount of his contributions under this Act together with compound interest thereon calculated to the date of his retirement at the rate of three per centum per annum by half-yearly rests, the local authority shall pay to his legal personal representative out of the superannuation fund the difference between the total amount which such contributor has received by way of superannuation allowance and the aggregate amount of his contributions under this Act, together with compound interest thereon at the rate and calculated as aforesaid up to the date of his retirement.

Lords Amendment:

In Sub-section (2), leave out the words" an aggregate amount equal" and insert "an amount equal in the aggregate."

Agreed to.

CLAUSE 13.—(Notice of certain proposals.),

At least one month's notice in writing shall be given to every member of the local authority of the time at which any proposal to return contributions to an officer or servant who has been dismissed or resigns in accordance with the provisions of the Section of this Act of which the marginal note is "Forfeiture for fraud, etc., or any pro-
posal to grant a gratuity under this Act will be considered.

Lords Amendments:

Leave out the word "time," and insert the word "meeting."

After the word "resigns" insert "or to make any payment."

Leave out the words
the Section of this Act of which the marginal note is Forfeiture for fraud, etc.,
and insert "Section nine of this Act."

Agreed to.

CLAUSE 15.—(Officers and servants to contribute).

(2) Nothing in this Act shall require any officer or servant to make any contribution for the purposes of this Act in respect of any period previous to the appointed day.

(3) The provisions of this Section shall not apply to any officer or servant who is fifty-five years of age or more on the appointed day or at the date of his appointment unless his service with any other local authority is reckoned under the provisions of this Act, and no such officer or servant shall contribute for' the purposes thereof.

Lords Amendments:

At the beginning of Sub-section (2) insert
Subject to the provisions of Subsection (2) of Section eight of this Act.

In Sub-section (3) leave out the words
unless his service with any other local authority is reckoned under the provisions of this Act.

At the end of the Clause insert
unless such officer or servant shall be appointed after the appointed day, and his service or any part of his service with any other local authority is under the provisions of this Act reckoned as contributing service.

Agreed to.

CLAUSE 16.—(Allowance for previous service.)

(1) Non-contributing service shall be reckoned for determining whether an officer or servant is entitled to a superannuation allowance under this Act, and in calculating the superannuation allowance of any officer or servant who is so entitled, his allowance in respect of his non-contributing service shall be at the rate of one one-hundred-and-twentieth (or in the case in which the local authority by special resolution so decide at such rateas the local authority may determine not exceeding the rate of one-sixtieth) of the average amount of his salary or wages for the last five years of his service or aggregate service in respect of each year (not exceeding
forty years) of his service, and in reckoning the non-contributing service of any officer or servant any portion of a year during which such officer or servant has served for more than six months shall be reckoned as a year:

Provided that the amount of any superannuation allowance granted in respect of non-contributing service, so far as it exceeds one-hundred-and-twentieth of such average amount as aforesaid in respect, of each year of service, shall not be paid out of the superannuation fund but shall he chargeable upon the same rates and revenues as those upon which the salary or wages of the officer or servant to whom the allowance is granted are charged.

(2) In the case of an officer or servant of a local authority adopting this Act, no period of service with any other local authority shall be reckoned for the purposes of this Act unless such officer or servant shall within six months from the appointed day prove to the reasonable satisfaction of the local authority employing such officer or servant that he has been in the service of any such authority:

Provided that no service shall be so reckoned in respect of which an officer or servant is entitled to any superannuation allowance or gratuity other than a superannuation allowance or gratuity under this Act.

(3) Notwithstanding anything to the contrary contained in this Act an officer or servant who has served successfully as a teacher and on an administrative staff shall have the years of service which would be recognised under any Act for the time being relating to the superannuation of school teachers recognised for the purposes of this Act as if such service had been wholly on an administrative staff:

Provided that any such last-mentioned officer or servant shall not he entitled to any greater superannuation allowance from the local authority under this Act than shall he sufficient, together with any superannuation allowance under any such Act as aforesaid, to make up the amount to which he would have been entitled had his service been wholly on the administrative staff of such local authority, and for the purpose of this section account shall be taken in such manner as the Minister of Health shall prescribe of any capital sum paid or payable to the officer or servant under the provisions of any such Act.

Lord Amendments:

In Sub-section (1), after the word "case" ["case in which the local authority by special resolution"], insert "of any officer or servant."

Leave out the word "special."

Leave out the words "or aggregate service."

After the word "exceeds" ["so far as it exceeds"] insert the word "one."

After the word "same" ["same rates and revenues"] insert. "funds."

In Sub-section (2) leave out the words
Provided that no service shall be so reckoned in respect of which an officer or servant is entitled to any superannuation allowance or gratuity other than a superannuation allowance or gratuity under this Act.

In Sub-section (3), leave out the word "successfully" and insert "successively."

Leave out the words "of Health."

At the end of the Clause insert a new Sub-section:
(4) In the case of an officer or servant occupying a designated post on the appointed day who is fifty-five years of age or more on that day, service after the appointed day in a designated post shall be deemed to be non-contributing service.

Agreed to.

CLAUSE 17.—(Contributions.)

If any officer or servant in service on the appointed day—
(a) retires after contributing service of less than ten years, owing to his becoming incapable of discharging the duties of his office with efficiency by reason of permanent ill-health or infirmity of mind or body, or

Lords Amendment:
In paragraph (a), after the word "office," insert "or employment.

Agreed to.

CLAUSE 18.—(Superannuation, Fund.)

(1) The local authority shall establish and administer a superannuation fund to which shall be carried and credited in each year—

(d) the amount of any transfer values received by the local authority under this Act; and
(e) such amount as may be certified by an actuary as soon as may be after the adoption of this Act, as necessary in order that the superannuation fund may be solvent, to be calculated so as to cast upon the local authority, so far as may be, an equal annual charge for a period not exceeding forty years from the appointed day.

(2) The equivalent contribution and the equal annual charge shall be made out of the same rates and revenues as those upon which the salaries or wages from which the said amounts so deducted are charged.

Lords Amendment:

In Sub-section (1, d), after the word "values," insert "or payments in lieu of transfer values."

In Sub-section (1, e), leave out the words "adoption of this Act" and insert "appointed day."

In Sub-section (2), after the word "same," insert the word "funds."

Agreed to.

CLAUSE 19.—(Actuarial investigation.)

(1) Once at least in every five years the condition of the superannuation fund shall be submitted by the local authority to an actuary, who shall consider the same and shall make an actuarial valuation of the superannuation fund.

Lords Amendment:

In Sub-section (1), after the word "valuation," insert "of the assets and liabilities."

Agreed to.

CLAUSE 22.—(Arbitration.)

Any question which may arise between the local authority and any officer or servant as to the right to or the amount of a superannuation allowance or the right to any return of contributions under this Act or the amount of the contribution of such officer or servant shall, in default of agreement, be referred to and determined by an arbitrator to be agreed upon between the local authority and such officer or servant or, failing such agreement, 'appointed by the Minister of Health, and subject as aforesaid the provisions of the Arbitration Act, 1889, shall apply to any such reference.

Lords Amendment:
Leave out the words "of Health.

Agreed to.

CLAUSE 23.—(Gratuities.)

12.M.

(1) The local authority may in any case in which an officer or servant is permanently incapacitated by an injury sustained by him in the actual discharge of his duty and without his own default, and specifically attributable to the nature of his duty grant to such officer or servant, subject to such conditions as they may think fit, such gratuity either by way of a lump sum or periodical payments as they may consider reasonable having regard to all the circumstances of the case, including any statutory right to compensation or any allowance or gratuity under this Act, so however that these sums received by him shall not exceed in all the amount of any allowance or gratuity to which he would have been entitled if he had already attained the age of sixty-five at the date when he became incapacitated.

(2) The local authority may grant to any officer or servant who is not entitled to a superannuation allowance under this Act, on his retiring from service, such gratuity as
the local authority may by special resolution determine, not exceeding a sum equal to twice the amount of the salary or wages of such officer or servant during the year which immediately precedes his retirement;

Provided that any gratuity granted under this Section shall not be paid out of the superannuation fund, but shall be chargeable upon the same rates and revenues as those upon which the salary or wages of the officer or servant to whom the gratuity is granted are charged.

Lords Amendments

In Sub-section (1): Leave out the word "these," and insert "the."

Leave out the word "all" ["shall not exceed in all"], and insert "the aggregate."

In Sub-section (2): Leave out the word "special."

Leave out the words "Provided that."

After the word "same" insert "funds."

Agreed to.

CLAUSE 24.—(Scheme to be submitted where this Act adopted by local authority having a superannuation fund in operation.)

If this Act be adopted by a local authority having an existing superannuation fund or scheme in operation, such local authority shall prepare a scheme for substituting for such superannuation fund or scheme a superannuation fund under the provisions of this Act and providing for (among other things) the application, transfer, or disposal of any then existing funds, securities, or policies of insurance or the, proceeds thereof, and for adequately protecting the rights and interests of the various parties interested in such existing superannuation fund or scheme.

A scheme under this Section shall be submitted by the local authority to the Minister of Health for his approval, and this Act shall not become operative in the case of such local authority until such scheme, with or without modification, shall have been approved by the Minister of Health.

Lords Amendments:

Leave out the words "an existing superannuation fund or scheme" and insert
any superannuation scheme or other scheme for ensuring benefits to an officer or servant on retirement.

Leave out the words "fund or" ["fund or scheme a superannuation fund under the provisions"]

After the word "fund" ["a superannuation fund under the provisions"], insert "or scheme."

After the word "Act," insert "with such modifications and adaptations as may be required."

Leave out the words "existing superannuation fund or" ["such existing superannuation fund or"], and insert "first mentioned."

Leave out the words "of Health" ["Minister of Health for"]

Leave out the words "of Health" ["approved by the Minister of Health"].

Agreed to.

CLAUSE 25.—(Payments and expenses under this Act.)

Any payments or expenses made or incurred by any local authority under the provisions of this Act or in carrying the provisions of this Act into execution and not otherwise provided for shall, in the case of any officer or servant in respect of whom any payment or expense is made or incurred, be paid out of the same rates or revenues as those upon which the salary or wages of such officer or servant is or are charged and subject as aforesaid shall be made and paid out of such fund, rate, or revenue as such local authority shall determine.

Lords Amendment:
After the word "same" insert "funds.

Agreed to.

CLAUSE 28.—(Provision as to existing-clerks of the peace.)

This Act shall apply in the case of a clerk of the peace or deputy clerk of the peace, and to any person in the whole-time employment of a clerk of the peace for the purposes of his office, as though such clerk, deputy clerk, or person were in the service of the county council.

Provided that—

(a) any clerk-of the peace holding office upon the appointed day shall be entitled by notice in writing to the county council within six months from the appointed clay to elect to continue to hold taco upon the same terms as lie held immediately before the appointed day; and
(b) the county council mar, in designating any person employed as aforesaid by a cleric of the peace, make such conditions with regard to increases of salary after the appointed day and the date of retirement of such persons as they may think fit.

Lords Amendments:

Leave out the word "whole-time" ["whole-time employment of a clerk"] and insert the word "permanent."

Leave out the words "his office" and insert "any office held by him as such clerk."

In paragraph (a), after the word "day" ["before the appointed day"], insert
and this Act shall not apply to any such Clerk of the Peace who has given such notice.

At the end of the Clause insert a new Sub-section:
(2) Save as otherwise expressly provided in Section six of this Act, nothing in this Act shall affect the tenure of office of any Clerk of the Peace to whom this Act applies.

Agreed to.

CLAUSE 29.—(Saving for Superannuation (Metropolis) Act.)

Notwithstanding anything contained in this Act, or the adoption of this Act by any local authority, the Superannuation (Metropolis) Act, 1866, shall continue to apply and have effect in the case of officers or servants in the service on the appointed day of any local authority to which the said Act of 1866 applies, and any such officer or servant shall not be deemed to be an officer or servant for the purposes of this Act:

Provided that at any time within six months after the appointed day such officer may signify in writing to such local authority his desire to become an officer or servant for the purposes of this Act, and thereupon the said Act of 1866 shall cease to apply in the case of such officer or servant as from the appointed day, and such officer or servant shall he deemed to be and to have been an officer or servant for the purposes of this Act.

Lords Amendments:

After the word "day" ["the appointed day such officer"] insert the word "any."

After the word "officer" ["such officer may signify"] insert "or servant."

At the end of the Clause insert a new Sub-section:
(2) Where this Act is adopted by a local authority to whom the said Act of 1866 applies, a scheme made under Section twenty-four of this Act may provide that any allowances already granted under the said Act may as from the appointed day be charged upon the superannuation fund.;

Agreed to.

Lords Amendment:

After Clause 29 insert new Clause:

B.—(Saving for express provisions affecting officers or servants.)

Nothing in this Act shall prejudice or affect any express provision contained in any Act of Parliament or any Order confirmed by or having the effect of an Act of Parlia-
meat relative to any superannuation or retiring allowance or any other allowance of a similar character in the case of any officer or servant referred to in such provision.

Agreed to.

CLAUSE 30.—(Application.)

(2) This Act, in its application to Scotland, shall he subject to the following provisions:—
(b) "Local authority" means any county council, town council, parish council, or other authority whatsoever having power to levy or to borrow on the security of a rate and includes any combination of local authorities under this Act:
Provided that this Act shall not apply to a local authority, other than a county, town, or parish council or an education authority or a district board of control or a combination of such authorities employing fifty or more officers or servants proposed to be designated as officers or servants for the purpose of this Act;
(c) "Rate" means an assessment or rate the proceeds of which are applicable to public local purposes and which is leviable on lands and heritages, and includes any sum which though obtained in the first instance by a precept certificate or document requiring payment from some authority or officer is, or can be, ultimately raised out of a rate;
(d) This Act shall not apply to any county or town clerk who shall be fifty-five years of age or more at the appointed day if within six months after such appointed day he gives notice in writing to the council of his desire to continue to hold his office on the same terms as he held it prior to the appointed day;
(e) Section twenty-nine of this Act and references to the Arbitration Act, 1899, shall not apply.

Lords Amendments:

In Sub-section (2), leave out the word "provisions" and insert the word "modifications."

In Sub-section (2, b), leave out
or other authority whatsoever having power to levy or to borrow on the security of a rate,
and insert
education authority or district board of control.

In Sub-section (2, b), leave out
this Act shall not apply to a local authority, other than a county, town, or parish council or an education authority or a district hoard of control or a combination of such authorities employing fifty or more officers or servants proposed to be desig-
nated as officers or servants for the purpose of this Act;
and insert
no local authority or combination of local authorities shall be entitled to adopt this Act unless there are in the service of such authority or of the authorities so combining, as the case may be, not less than fifty officers or servants occupying posts proposed to be designated as established posts for the purposes of this Act.

Leave out paragraph (c), and insert the following new paragraph:
(c) Sub-section (1) of Section five of this Act shall apply to the councils of any two or more adjoining counties in like manner as it applies to the local authorities therein mentioned, and Sub-section (3) of the said Section shall apply to the officers or servants of any local authority within the meaning of the Local Authorities Loans (Scotland) Act, 1891.

In Sub-section (2, d), after the word "day" ["appointed day if within six months"], insert,
or to the town clerk of any royal burgh holding office at the appointed day.
In Sub-section (2, e), leave out "twenty-nine," and insert "twenty-eight.

Agreed to.

ECCLESIASTICAL TITHE RENTCHARGES (RATES) BILL.

Order for consideration of Lords Amendments read.

Motion made, and Question proposed, "That the Lords Amendments be now eonsidered."—[Mr. Pretyman.]

Mr. SPEAKER: I must point out that the Amendments to this Bill are, I think, all privilege Amendments. I do not know what course the right hon. Member for Chelmsford (Mr. Pretyman) wishes to take.

Mr. PRETYMAN: I venture to ask the House to accept the first Amendment, altering the time at which this Bill would operate from April to October, for the reason that otherwise, owing to the time which has elapsed since the Bill was passed in this House, it would become retrospective, as the demand notes for the April rates have already been issued and dealt with. I therefore ask the House to accept that Amendment. The remaining Amendments I should propose to ask the House to disagree with, both on the
ground of privilege and because they would create a very great difficulty. There was a small deficit created by the Act of 1920 which under this new Clause inserted by the Lords would have to be divided into three, affecting firstly, the ratepayers of the parish, secondly the ratepayers of the Union, and thirdly the ratepayers of the county. A large number of ratepayers would be brought in who are not now brought in, and therefore I ask the House not to waive its privilege, but to disagree to all but the first Lords Amendment.

Question put, and agreed to.

Lords Amendments considered accordingly.

CLAUSE 1.—(Relief or abatement in case of several benefices held by one person.)

Where the owner of tithe rentcharge attached to a benefice holds more than one benefice (whether united for ecclesiastical purposes or not so united) he shall, in respect of any rate made on or after the first day of April, nineteen hundred and twenty-two, be entitled under Sub-section (2) of Section one of the Ecclesiastical Tithe Rentcharge (Rates) Act, 1920, to such relief or abatement only as he would have been entitled to if the several benefices were one benefice and any tithe rentcharge attached to any of the several benefices were attached to that one benefice and the total income arising from the several benefices arose from one benefice.

Lords Amendment:

Leave out the word "April" and insert the word "October."

Agreed to.

Lords Amendment:

After Clause 1, insert the following new Clause:

NEW CLAUSE.—(Deductions where sung assessed is irrecoverable.)

(1) Where any sum assessed upon any owner of tithe rentcharge attached to an ecclesiastical corporation or benefice in respect of any rate made by the overseers of a parish has by reason of the provisions of the Ecclesiastical Tithe Rentcharges (Rates) Act, 1920, become irrecoverable the overseers in satisfying any precept made upon them by any spending authority may, subject to the provisions of this Section, make such deduction as is hereinafter authorised from the amount which would but for this Section he payable to the spending authority.

(2) The amount which may be neducted under this Section from a precept shall not exceed the sum which bears the same relation to the amount irrecoverable as afore-
said as the amount in the pound of the rate estimated to be required for the purpose of satisfying the precept bears to the total amount in the pound for which the rate was made.

(3) Where a precept sent by any spending authority to overseers includes a sum payable under precept to another spending authority, the sum so payable may he reduced by a deduction equivalent to that which could have been made by the overseers in pursuance of this Section if the precept had been addressed to them.

(4) This Section shall apply only hi respect of any sum which has become irrecoverable in respect of any rate made on or after the first day of October, nineteen hundred and twenty-two, and before the first day of January nineteen hundred and twenty-six.

(5) In this Section "spending authority" has the same meaning as in the Agricultural Rates Act, 1896, "precept" includes a contribution order, and "rate" means any rate made for the relief of the poor and for other purposes chargeable thereon according to law.

Mr. PRETYMAN: I beg to move, "That this House doth disagree with the Lords in the said Amendment."

The MINISTER of AGRICULTURE (Sir Arthur Boscawen): I am obliged to make a short statement in reference to this Amendment, because, when the Clause was inserted in another place, the Government, in the Horse of Lords, accepted the Amend-merit. If those interested in the matter are anxious about persisting, it will be my duty to advise the House that we ought to agree with the Amendment. I have, however, received a letter from the Noble Lord the Member for Aldershot (Viscount Wolmer), who was interested in this Amendment, and was its chief author, saying that he is willing it should be waived in order that the rest of the Bill might proceed without opposition. The Noble Lord has called my attention to the fact that the present condition of the law as regards tithes and tithe rates is very unsatisfactory, especially in view of the fact that the Act of 1920 terminates in 192.5; and having regard to the temporary nature of the present legislation, I propose to advise that there should be an inquiry, and that either a Royal Commission or a strong Departmental Committee be appointed shortly to go into the whole question of the incidence, redemption and rate of tithes.

Mr. HOGGE: Is this a proposal on the part of the Government to set up a Royal
Commission? May I ask the Leader of the House that question?

Mr. CHAMBERLAIN (Leader of the House): When my right hon. Friend speaks, of course he speaks on behalf of the Government.

Question, "That this House doth disagree with the Lords in the said Amendment," put, and agreed to.

CLAUSE 2.—(Short title.)

This Act may be cited as the Ecclesiastical Tithe Rentcharges (Rates) Act, 1922, and the Ecclesiastical Tithe Rentcharge (Rates) Act, 1920, and this Act, may be cited together as the Ecclesiastical Tithe Rentcharges (Rates) Acts, 1920 and 1922.

Lords Amendment:

At the end of the Clause insert a new Sub-section:
(2) This Act shall come into operation on the first day of October, nineteen hundred and twenty-two.

Disagreed with.

TITLE.

"A Bill intituled An Act to amend the Ecclesiastical Tithe Renteharge (Rates) Act, 1920, in respect of the relief or abatement to an owner of tithe rentcharge who holds more than one benefice."

Lords Amendment:

At the end of the Title insert
and to provide for an adjustment of payments in consequence of the reduction of rates authorised by that Act.

Disagreed with.

Ordered, That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their Amendments to the Bill.

Committee nominated of Mr. Pretyman, Sir A. Boscawen and Mr. Thomas Davies.

Two to be the quorum.

To withdraw immediately. — [Mr. Pretyman.]

Reasons for disagreeing to Lords Amendments reported, and agreed to.

To be communicated to the Lords.— [Mr. Pretyman.]

The remaining Government Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to the Resolution of the House of 25th July.

Adjourned at Nine Minutes after Twelve o'Clock.